Implications of Accounting Research for the FASB's Initiatives on Disclosure of Information about Intangible Assets

On January 9, 2002, the Financial Accounting Standards Board (FASB) added a project to its technical agenda titled Disclosure of Information about Intangible Assets Not Recognized in Financial Statements. The Financial Accounting Standards Committee of the American Accounting Association responded to the FASB's request for comments on a Proposal for a Project on Disclosure about Intangibles. This paper contains the Committee's summary of research related to intangibles and the Committee's evaluation of the implications of the research for disclosure related to and recognition of intangible assets. Overall, research suggests that investors use disclosures on intangibles expenditures and that intangibles expenditures have future benefits, but that these benefits are more uncertain than those associated with conventionally recognized assets. Thus, there is some empirical support for the capitalization of estimated R&D intangibles.