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Accounting as a means to legitimacy: The case of internally generated intangibles
Örebro University, Örebro University School of Business.ORCID iD: 0000-0003-1176-659x
School of Business, Society and Engineering, Mälardalen University, Västerås, Sweden.ORCID iD: 0000-0001-8278-7959
Örebro University, Örebro University School of Business.ORCID iD: 0000-0002-7153-3977
Örebro University, Örebro University School of Business.ORCID iD: 0000-0002-0708-509X
2024 (English)In: Qualitative Research in Accounting & Management/Emerald, ISSN 1176-6093, E-ISSN 1758-7654, Vol. 21, no 2, p. 77-104Article in journal (Refereed) Published
Abstract [en]

Purpose: The purpose of this study is to identify the norms that underlie and condition the decisions made by preparers of financial reports.

Design/methodology/approach: This interview-based study illustrates how financial report preparers engage in behaviors linked to the perception of recognition and measurement of internally generated intangible assets by important stakeholders. All of the companies included in the study adhere to International Financial Reporting Standards when creating their consolidated financial statements. The participants selected for the study are involved in accounting decisions related to research and developmentin accordance with International Accounting Standard (IAS) 38.

Findings: The authors identify the normative assumptions underlying the recognition and measurement of internally generated intangibles, which are based on concerns of consistency, credibility and reasonableness. The authors find that the normative basis for legitimacy in financial accounting is primarily related to cognitive legitimacy and is not of a moral or pragmatic nature.

Originality/value: The study reveals that recognition and measurement of internally generated intangibles in financial accounting relate to legitimacy. The authors identify specific norms that form the basis of this legitimacy, namely, consistency, credibility and reasonableness. These identified norms serve as constraints, mitigating the risk of judgment misuse within the IAS 38 framework for earnings management.

Place, publisher, year, edition, pages
Emerald Group Publishing Limited, 2024. Vol. 21, no 2, p. 77-104
Keywords [en]
IAS 38, Intangibles, Legitimacy, R&D, Recognition, Measurement
National Category
Business Administration
Research subject
Business Studies
Identifiers
URN: urn:nbn:se:oru:diva-110124DOI: 10.1108/qram-04-2021-0075ISI: 001113090700001Scopus ID: 2-s2.0-85178446339OAI: oai:DiVA.org:oru-110124DiVA, id: diva2:1818293
Funder
The Jan Wallander and Tom Hedelius Foundation, P2017-0076:1Available from: 2023-12-10 Created: 2023-12-10 Last updated: 2024-06-17Bibliographically approved

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Lundh, SimonFrostenson, MagnusHelin, Sven

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