Accounting And Disclosure Of Intangible Assets In Modern Enterprise

Intangible assets have been playing a great role in enterprise operation and have been a major power to decide the cash flow and market value of enterprise in the "knowledge-based" activities. Thus, the accuracy of accounting, appropriation of disclosure for intangible assets will affect the relevance and reliability of accounting information directly. However, in a traditional accounting system, the focus was on tangible assets such as plant assets. With the development of science and technology, the information of intangible assets in financial statements has not meet the requirement of users: the content is narrow, historical cost can't reflect their real value. Accounting system must adjust to changing conditions. So it is necessary to develop new methods to recognize and measure intangible assets in order to enhance the usefulness of accounting information.The article begins by describing revelant theories of intangible assets. Then clarifies the accounting treatment according to the value movement of intangible assets. The section consists of two chapters, introducing the accounting treatment in two stages: acqusition stage and value changed stage. Thirdly, it discusses and analyzes goodwill all-sidely and systematically that concludes internally generated goodwill, purchased goodwill and negative goodwill. The article presents that the internally generated goodwill should be recognized and measured. On the basis of recognizing internally generated goodwill, the article presents that purchased goodwill is recognized as an asset, as in the past, but once it is recognized, the asset remains on the balance sheet indefinitely, subject only to review for impairment when circumstances warrant. That is, the new accounting rules require to eliminate the systematic amortization of goodwill. Lastly, the article, provides empirical evidence to prove that intangible assets have value relevance. On the basis of empirical analysis, the author presents the speculation on developing of the information disclosure system of intangible assets.