Research On Accounting Issues Of Digital Products

Advanced computer and network technology makes more and more digital products. As newly-developing things, digital products has brought a great change to the world, and it will take up a greater share in the economy. But now there is no unified and good accounting treatment for digital products. It is mainly due to the experts, scholars in accounting field and producers, operators for digital products have different views, and therefore they cannot reach a consensus on a unified accounting treatment for digital products. This will undoubtedly make much influence on the quality of relevant companies’ accounting information for digital products. Thus it will control the information users—stakeholders’ decisions. So, the accounting issue of digital products become a hot issue and need to be inquired and researched.This paper, uses the standard research methods combined with the current research achievement of digital products, analyzes some specific examples of digital products based on the definition and classification, and connects with accounting standards, laws and regulations, then proposes a unified solutions of accounting issues for digital products.This paper points out:(1) Digital products exist digital morphologically and they are completely digital things. As they are special, it is needed to establish new accounting subjects such as "digital assets", "research and development costs for digital assets", "accumulated amortization of digital assets", "research and development spending for digital assets" and others to make business accounting. The digital products which enterprises owned or controlled for sale can be accounting confirmed. Accounting measurement on the basis of the price they purchase for digital products or the costs which they use to develop by themselves.(2) The accounting recognition for the incomes of digital products will be different because of different classifications, pricing strategies or marketing strategies. For there is no relationship between the cost and quantity of digital products, in order to make accounting recognition for the cost of digital products, first the expected earning period should be determined. On this basis, the period of amortization and the current amortization should be made clearly. The definite current amortization together with related costs are included in the period costs, debited "main business costs", credited "accumulated amortization of digital assets", "Employee benefits payable" or other subjects.(3) In order to improve the quality of disclosure for digital products, the format of existing balance sheet should be modified. That is adding "digital assets" and "research and development spending for digital assets" into non-current assets of balance sheet. Then the beginning balances, ending balances, the expected earning period, amortization method, amortization amount, capitalized research and development spending and expensed research and development spending should be made detailed descriptions in the financial statement footnotes.