- Automated collection and on-demand delivery of financial and sales data in the enterprise.
- Reduce the time spent on consolidation, planning and reporting processes through automation.
- Convenient access to the data and evaluations via Excel client, web browser (Internet Explorer) or iPad app.
- Introduction of standardized and tailor-made OBS solutions at a fixed price
Accounting for software according to HGB, US-GAAP and IFRS – Integrative analysis of the regulations on the approach, evaluation and revenue realization of software from manufacturer and user view
Meaning and importance of the topic
The accounting of intangible goods in general and software in particular is a central topic in the area of external accounting both nationally and internationally. This is due to the transformation of the industrial nations towards service and high technology companies, which is associated with primarily intangible success factors. This development finds expression in increasing investments in intangible assets and in the rising purchase price of goodwill in business acquisitions. At the beginning of the 1980s, goodwill paid on acquisitions averaged over book value was 20% of the total urchase price; in the meantime over 50% and in some cases significantly more common. It is questionable whether the national and international regulations on the accounting of software are in line with the increasing
importance of intangible value drivers.
National accounting systems are complex entities of accounting standards and practices, the actual design of which depends on a variety of socio-economic factors such as the legal system, the tax system, the capital market structure and the profession of auditor. The different design of accounting systems at international level is closely related to the respective capital market structure. For example, large public limited companies in the European region are often family-owned, under the control of banks or state-owned, while in Anglo-American countries a broad distribution of shares is common. The US public capital market provides approximately 55-60% of the liabilities of resident companies, while German companies only receive 30% of their equity and debt capital in this way. The respective accounting standards and norms only form part of the entire “balance sheet culture” of the respective country. The regionally different circumstances are contrasted by the increasing internationalization of capital markets and the need of investors for a uniform “balance sheet language”, which exert pressure in the direction of globally harmonized accounting.
The main motive behind the promotion of globally recognized accounting standards is the increasing volume of cross-border investments. National accounting practices are often associated with translation difficulties and
uncertainties for foreign investors and thus complicate the international transfer of capital: “Apparent differences in financial measures of enterprise risk and return characteristics could be as much to differences in accounting practices the attributes being measured. “Companies seeking to capitalize on foreign capital markets must therefore provide investors with comparable, decision-relevant and timely financial information that allows conclusions to be drawn about future economic development. In particular, the special features of external accounting in Japan, Switzerland and Germany often require special analyzes by international investors and financial analysts in order to ensure cross-border comparability of the financial statements.
The objective of uniform international accounting leads to a conflict around globally accepted accounting standards. In terms of content, continental European accounting standards – represented in this work by the HGB – and the Anglo-Saxon accounting system – represented by IFRS and US GAAP – are in contrast. While accounting in Germany, France, Italy, Spain, Belgium, Sweden and Japan is considered continental European, the Anglo-American accounting philosophy dominates in the United States, United Kingdom, Denmark, Canada, Australia and other Commonwealth countries. At the political level, on the other hand, a competition between the closely related IFRSs and US GAAP is emerging as the world standard for capital market-oriented companies.
The different objectives and framework principles of continental European and Anglo-American accounting also have conflicting views on accounting for intangible assets. The difficulty of recognizing intangible assets results from the tension between two accounting principles: the principle of accrual-based and informative profit determination stands in opposition to the principle of objectivity and reliability. The contrast applies in particular to internally produced intangible goods, which represent an economic value and must be capitalized in the sense of an accrual-based performance, but are often not objectively tangible and reliably measurable in terms of their debt-worthful value.