Intangible assets in Swedish private sector accounting

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Stakeholder theory

The recognition of assets in the balance sheet, and especially the recognition of intangible assets, is in some case difficult (Baboukardos et al., 2016). Whether the assets are recognized or not will affect the annual reports, and thereby it could also affect the stakeholders in different ways. This implies that it is important to understand who the stakeholders are and what their demand is. The stakeholder theory describes different stakeholders and their relationships with the organization. Stakeholders could also be divided in either internal or external ones. In opposite to the common view that only shareholders should be seen as stakeholders, this theory extends the perspective and includes more parties as well such as employees, suppliers, customers, financers, communities and government, competitors and owners (Grönlund, Tagesson, & Öhman, 2010). Scholars have during the years developed and added their point of view to this theory, which was initially developed by R. Edward Freeman (2010) in his landmark book named Strategic Management: A Stakeholder approach. The definition of who is a stakeholder differs from scholar to scholar (Mitchell, Agle, & Wood, 1997).
Freeman (2010, p. 25) defines a stakeholder as someone that “…can affect or is affected by the achievement of the organization’s objectives”. Donaldson and Preston (1995, p. 67) claim that stakeholders are “persons or groups with legitimate interest in procedural and/or substantive aspects of corporate activity” and a stakeholder is “identified by their interest in the corporation, whether the corporation has any corresponding functional interest in them”. According to this, organizations’ and stakeholders’ relationship are mutually dependent on each other which implies that it is of great importance for an organization to define their stakeholder. In order for an organization to define their stakeholder, they both need to understand the behaviour of the stakeholder and consider each and every one of the them (Bruzelius & Skärvad, 2004).

Disclosure and legitimacy theory

Disclosure is a concept used within accounting which means that a company publishes information about their business (Rimmel, 2016). Accounting information is often required by shareholders and other users to ease their process of making relevant decisions (Meek, Roberts, & Gray, 1995). In authorities operating within the public sector, these users are primarily internal decision makers, politicians and officials. Simultaneously, citizens could be seen as owners in an organization held under the public sector because they get directly affected by the actions taken by the government (Falkman & Orrbeck, 2001).
The demand of accounting information is accommodated by companies who voluntary disclose a part of this information (Meek, Roberts, & Gray, 1995). Disclosure could also be mandatory for companies and this is often made through financial statements and annual- and sustainability reports. The companies could also describe how they comply with the different accounting standards and other legislation (Rimmel, 2016).
Accounting standards have an impact on companies and their disclosure activities since the standards require compulsory disclosures. Associated with this form of disclosure is high quality in the information provided and low asymmetric information (Rimmel, 2016). Furthermore, the quality of compulsory disclosures contributes to differences between companies with growth opportunities. The asymmetric information will be high and the disclosure quality of a lower amount when the companies have more opportunities to grow. Conversely, the disclosed information by companies with a minimum chance to growth will be of greater quality and there will be a low amount of asymmetric information produced (Core, 2001). The amount of information that is disclosed is essentially higher in bigger companies compared to smaller ones (Meek, Roberts, & Gray, 1995). Empirical studies show that there is a connection between disclosure and credibility. There is a relationship between asymmetric information, the quality of disclosure, initiatives taken by the management, and corporate governance (Core, 2001). Core further states that there is a demand for developing the measurement of disclosure quality.
Companies have several different stakeholders which also implies that there are several interests to considerate in the business. The communication and the way managers dealt with external parties were one of the aims with the legitimacy theory in the sense that it sought to explain why managers acted as they did (Magness, 2006). The legitimacy theory states that the frames of the society affect the behaviour of companies since they aim to act within these frames. The fundament for this theory is therefore that there is some sort of contract of social character between companies and the society they operate within (Rimmel, 2016).
The subsequent reactions of disclosures have been observed through the legitimacy theory and Lightstone and Driscoll (2008) have found a connection between disclosures made voluntarily and symbolic legitimacy management. The disclosed information could include inaccuracies or manipulations that seek to give a perception of the company as being legitimate. This despite the increase in both expectations from the industry and requirements from legislators that the disclosed information should be accurate (Lightstone & Driscoll, 2008).
Different expectations from the society pressures the companies to act in certain ways and this could contribute to an increase in the amount of voluntary disclosure (Rimmel, 2016). Furthermore, if the power of stakeholders is of a high amount, the active and strategic companies seem to put more emphasis on disclosures that provides information about their responsibility in a social manner (Magness, 2006).

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1 Introduction
1.1 Background .
1.2 Problem discussion
1.3 Research question
1.4 Purpose
1.5 Delimitations .
1.6 Contribution.
1.7 Thesis outline
2 Frame of reference
2.1 Private sector accounting
2.2 Public sector accounting
2.3 Intangible assets
2.3.1 Intangible assets in Swedish private sector accounting
2.3.2 Intangible assets in the Swedish public sector accounting
2.3.3 Implications of the adoption of IAS/IFRS in Swede
2.4 Internally generated intangible assets .
2.5 Stakeholder theory
2.6 Disclosure and legitimacy theory
3 Method
3.1 Choice of method .
3.2 Sampling .
3.3 Data collection
3.4 Critics and implications of chosen method
3.5 Data analysis
4 Empirical findings
4.1 Value of intangible assets
4.2 Intangible assets in the public sector .
4.3 Intangible assets in the private sector .
5 Analysis
6 Conclusions and discussion
6.1 Conclusion
6.2 Critical reflections
6.3 Ethical and social issues
6.4 Suggestions for future studies.
References