National accounting for intangible assets in the knowledge economy
| DOI | https://doi.org/10.1108/13581981011033970 |
| Pages | 106-119 |
| Published date | 11 May 2010 |
| Date | 11 May 2010 |
| Author | Iain Clacher |
| Subject Matter | Accounting & finance |
THEMED PAPER
National accounting for intangible
assets in the knowledge economy
Iain Clacher
Leeds University Business School, Leeds, UK
Abstract
Purpose – The purpose of this paper is to review the issues, difficulties, importance for public policy
and current initiatives associated with developing a more comprehensive national accounting
framework in relation to public and private sector investments in intangible assets.
Design/methodology/approach – The paper analyses and evaluates the most salient statistics on
intangible asset investments and the implications for public and private sector policy makers.
Findings – The UK economy has a high representation of firms and activities that invest in
intangible assets that are not traditionally included in national accounts and that their exclusion has a
significant impact on the UK’s apparent growth and productivity performance.
Originality/value – The paper discusses a range of measurement and other difficulties in
significantly developing a comprehensive national accounting framework that fully incorporates the
impact of intangible asset investments upon national growth and productivity metrics.
Keywords Accounting,Public sector accounting, Intangibleassets, Knowledge economy,
United Kingdom
Paper type Research paper
1. Introduction
As the structure of developed economies around the world has moved away from
heavy industry and manufacturing, the role of intellectual capital and the knowledge
economy has become ever more important to growth and productivity. However,
this has presented national governments with a number of challenges. The first is
how to accurately measure the relative productivity of different parts of the economy.
From this there is then a problem of investment and capital allocation. If the
government can accurately estimate the productivity of all sectors of the economy then
the government can in turn allocate capital and investment to those sectors that are
most productive. However, where estimation is opaque or imprecise then the resultant
mis-allocation of resources will reduce the overall growth of the economy[1].
This paper highlights some of the technical issues around this problem and
discusses some of the conceptual challenges that are faced by governments in trying to
address this problem. The next section of the paper discusses intellectual property and
the effects of “propertizing” intellectual goods. Section 3 discusses the relationship
between research and development (R&D), a key driver of the knowledge economy,
and the business cycle. Section 4 discusses knowledge spillovers to highlight some of
the complexities of trying to estimate productivity, the section is essentially posing the
question how can such gains be quantified and incorporated into systems of national
accounting. Section 5 illustrates the relative importance of intangible assets to the
UK economy, Section 6 discusses the measurement issues surrounding intangible
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1358-1988.htm
JFRC
18,2
106
Journal of Financial Regulation and
Compliance
Vol. 18 No. 2, 2010
pp. 106-119
qEmerald Group Publishing Limited
1358-1988
DOI 10.1108/13581981011033970
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