RECOGNITION OF INTANGIBLE ASSETS UNDER IFRS

Abstract

Over time, intangible assets are increasingly outweighing tangible assets in many of the world's leading and largest companies by market capitalisation. At the same time, new intangible assets are emerging and old ones are transforming and acquiring new features, which complicates the process of accounting for them and adds more uncertainty, which in turn has a significant impact on financial statements. A content analysis was carried out to identify the impact of accounting for intangible assets under International Financial Reporting Standards (IFRS) on financial statements. Summarization, comprasion of scientific literature, content analysis, statistical, structural and scientific abstractions methods were used for the research. This article presents recognition of intangible assets under IFRS and their growing importance in financial statements are examined. Various scholarly interpretations of intangible assets are reviewed, alongside an analysis of the conditions for their recognition under IFRS. The scholarly debate surrounding these recognition criteria and their consequences is also addressed. To assess the impact of intangible asset recognition on financial statements, SAP SE and Siemens AG are used as case studies, demonstrating that financial reporting is significantly affected due to the money and time spent, as well as the inherent subjectivity in recognizing and measuring these assets.