Data - A New Emerging Type of Intangibles - How Can Accounting Standards Face this Challenge?

Abstract

In the digital economy era, the role of corporate data resources in corporate development is increasingly prominent. The accounting treatment of corporate data resources is an urgent issue to be studied. Based on the economic value creation characteristics of corporate data resources, in this pioneering study we propose that qualified corporate data resources could be classified into internal-used data assets, tradable data assets and strategic value data resources. We propose to enhance the recognition of the first two types of data assets in the financial statements using the conditional recognition method, and a mixed measurement model could be adopted in the subsequent measurement period. We propose to enhance the disclosure of strategic value data resources, more granular information about this type of data resource can be disclosed in a separate narrative report. The reporting entity is encouraged to disclose more information about the characteristics of data assets, the value-creation path of data assets, and risks related to data assets. Our study intends to establish a coherent set of data asset accounting standards and to be helpful to IASB as it considers revising its intangible assets accounting standards (IAS 38).

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