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Strategies for Change in Financial Reports

Strategies for Change in Financial Reports The paper investigates pressures for change in accounting that have been suggested by researchers and practitioners as a consequence of the emergence of the information age. Specifically, issues concerning the need for change in the traditional form and content of financial reporting to investors are addressed. One aim of the paper is to explore the nature of current problems and to speculate on future development of financial reporting. Several shortcomings in the content of financial reporting stem from a discrepancy between the valuecreating processes of modern corporations and the foundations underpinning the traditional accounting model. Today, different forms of intellectual capital are the prime resources that companies invest in to thrive in the future. However, the present accounting model has yet to accommodate Intellectual Capital. A second aim of this paper is to present strategies for expanding the traditional accounting reports with additional information on the investments in, and measures of, Intellectual Capital in a way that is both coherent and meets criteria concerning, e.g., completeness, verifiability and relevance. Three different strategies are discussed inclusion, extension and supplementing. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Human Resource Costing & Accounting Emerald Publishing

Strategies for Change in Financial Reports

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1401-338X
DOI
10.1108/eb029061
Publisher site
See Article on Publisher Site

Abstract

The paper investigates pressures for change in accounting that have been suggested by researchers and practitioners as a consequence of the emergence of the information age. Specifically, issues concerning the need for change in the traditional form and content of financial reporting to investors are addressed. One aim of the paper is to explore the nature of current problems and to speculate on future development of financial reporting. Several shortcomings in the content of financial reporting stem from a discrepancy between the valuecreating processes of modern corporations and the foundations underpinning the traditional accounting model. Today, different forms of intellectual capital are the prime resources that companies invest in to thrive in the future. However, the present accounting model has yet to accommodate Intellectual Capital. A second aim of this paper is to present strategies for expanding the traditional accounting reports with additional information on the investments in, and measures of, Intellectual Capital in a way that is both coherent and meets criteria concerning, e.g., completeness, verifiability and relevance. Three different strategies are discussed inclusion, extension and supplementing.

Journal

Journal of Human Resource Costing & AccountingEmerald Publishing

Published: Jan 1, 2000

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