Barriers to the accounting recognition of information as an asset

Abstract

Possession of information is a source of competitiveness benefits and effective management of such information are considered a strength of organizations. The sound use of information allows an organization to run faster and better, resulting in products and services that are of a higher quality and a lower cost with the benefits of reduced risk, improved competitive position, and higher return on investment. Information receives value not only from physical information technology systems that provide storage and the ability to analyze, but also contain intrinsic value that is rarely taken into account by traditional accounting methods. The objective of this paper is to develop an approach to recognition of information as an asset in accounting which is consistent with accepted accounting principles and includes specific characteristics. The main research methods were general scientific approaches to determining the essence, methods of deduction and induction, comparison, generalization. The content of financial information, which is used to prepare financial statements, is defined. The normative regulation of the recognition of assets is considered. The Framework identifies certain characteristics that ensure the recognition of an asset, including the existence of past events, rights, the potential for obtaining future economic benefits and control. The enterprise can determine the costs of creating information and has the right to information, but control is insufficient, there is uncertainty about the amount or timing of any inflow benefits that will ultimately result from an asset from information. IAS 38 «Intangible assets» requires identifiability and separable, that exists. An intangible asset shall be recognized if it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the cost of the asset can be measured reliably. An enterprise can measurement information at historical cost, as required by IAS 38 «Intangible assets», but it is actually hidden in the salaries of employees of the IT department and accounting department. Information does not obey the same rules of accounting standards that other assets do, it has some unique properties which must be to take into consideration in order to be able to measure its value to carry out recognition of information as an asset in accounting. This becomes increasingly important if accounting standards are revised to allow for reporting of internally generated information as an intangible asset.