Journal of Management Research

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Fudged Accounting Theory


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1 University of Windsor, Odette Business School, 401 Sunset Avenue, Windsor, Ontario N9B 3P4
     

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The topic of accounting for intangible assets such as trade marks, patents, brands and goodwill has been highly controversial in the accounting profession for many years. Furthermore, the accounting treatment of brands has importance for marketers. Until recently, the flexibility within the regulations allowed companies to use a variety of accounting treatment and this led to the generation of fudged accounting theory (Murphy, 1990). This empirical study based on recent accounting regulatory changes for intangible assets in the UK examines the validity of the theory in the food, drink and media industries. The analysis demonstrates that companies are moving from the capitalization of brands to that of goodwill. Policies in respect of amortisation are, however, more divergent and fudged accounting theory still applies. The UK approach is being regarded with interest by the International Accounting Standards Committee and fudged accounting theory may be generalisable in different accounting regimes.

Keywords

Intangible Assets, Tangible Assets, Brands, Goodwill, FRS 10, Fudged Accounting, Food/ Drink/Media Industries
User
Notifications

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  • Fudged Accounting Theory

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Authors

Audra Ong
University of Windsor, Odette Business School, 401 Sunset Avenue, Windsor, Ontario N9B 3P4

Abstract


The topic of accounting for intangible assets such as trade marks, patents, brands and goodwill has been highly controversial in the accounting profession for many years. Furthermore, the accounting treatment of brands has importance for marketers. Until recently, the flexibility within the regulations allowed companies to use a variety of accounting treatment and this led to the generation of fudged accounting theory (Murphy, 1990). This empirical study based on recent accounting regulatory changes for intangible assets in the UK examines the validity of the theory in the food, drink and media industries. The analysis demonstrates that companies are moving from the capitalization of brands to that of goodwill. Policies in respect of amortisation are, however, more divergent and fudged accounting theory still applies. The UK approach is being regarded with interest by the International Accounting Standards Committee and fudged accounting theory may be generalisable in different accounting regimes.

Keywords


Intangible Assets, Tangible Assets, Brands, Goodwill, FRS 10, Fudged Accounting, Food/ Drink/Media Industries

References