Adam Smith Observatory of Corporate Reporting Practices

Research activity and outputs

The Observatory engages several projects which have been solely funded by or co-funded with ACCA, ICAS and The Carnegie Trust for the Universities of Scotland and deliver separate research reports. 

Even though these outputs are intended for informing standard setters and regulators in the first instance, the research team aims at further analysing the related data and thus expand the reports into academic papers, publishable in highly reputable journals in the future.

The list below outlines the most recent concluded projects as well as those in progress.

Project 1

The capitalisation debate of internally generated intangible assets: exploration and evaluation expenditure in extractive industries.

This project is led by Prof Yannis Tsalavoutas and is co-funded with ACCA. It examines companies’ accounting policies and reporting practices on the wider area of intangible assets’ recognition, with a particular focus on exploration and evaluation expenditure in extractive industries. This work has resulted in a substantive research report, jointly with ACCA, and authored by colleagues associated with the Observatory. In the meantime, the Observatory has disseminated the preliminary findings via one roundtable discussion and online webinar to ACCA members which attracted c8,800 participants from across the world.  

Research report:  The Capitalisation of Intangibles Debate: Accounting for Exploration and Evaluation Expenditure in Extractive Activities.

Project 2

How real-time and quick-time data is shaping and transforming the practice and decision-making of financial analysts and professional investors.

This project has been led by Dr Mark Aleksanyan and was funded by ICAS. This research project specifically sets out to: a) Gain an evidence-based understanding of professional investors’ and financial analysts’ perceptions and usage of real-time and quick-time data in their practice of analysis of company performance, equity valuation and investment decision-making; b) Assess analysts’, investors’ and other stakeholders’ current and future perceived demand for real-time information in general, and quick-time corporate reporting information in particular; and c) Assess users’ perspectives on the need for a new corporate reporting and assurance paradigm, and/or future regulation of real & quick-time data. The related ICAS report was published at the end of 2022. Preliminary findings were communicated to ICAS members by Dr Mark Aleksanyan in an online interview with ICAS research Director Marie Gardner on 14 September 2021.

Project 3

Climate change risk-related disclosures in extractive industries. 

This project is led by Dr Diogenis Baboukardos and is co-funded with ACCA. The project reflects on calls for companies to consider climate‑related matters in applying IFRS Standards and aims at shedding light upon current climate change related reporting practices in the extractive industries. The first report looked at the 2019 annual reports of 60 IFRS reporting firms in the extractive industries with the highest meand CO2 emissions for the period 2016-2018. The second report looks at the 2020 annual reports of 56 of these firms. In the meantime, the Observatory has disseminated the findings of these reports via two roundtable discussions co-organised with ACCA and Carbon Tracker in April and September 2021 and one online webinar to ACCA members in December 2020, which attracted c6,600 participants from across the world (see news section for related links and announcements).  

1st Research report: Climate Change Risk-related Disclosures in Extractive Industries 

2nd Research report: Climate Change Risk-related Disclosures in Extractive Industries: A Comparative Study 

Project 4

Accounting for software development costs: a comparative study between US and UK firms.

This project is led by Boglarka Emese Dely and is funded by The Carnegie Trust for The Universities of Scotland. First, it aims at examining whether UK firms capitalise higher or lower amounts of internally generated software development costs compared to US firms. Second, the project aims at examining whether such an intangible asset is linked to future economic benefits and, if it does, whether such a a correlation is stronger or weaker for UK firms compared to US firms. The working paper stemming from this research was presented by Ms Dely at the 16th EUFIN Workshop in September 2021.

Project 5

The capitalisation debate of internally generated intangible assets: accounting for software costs.

This project is led by Prof Yannis Tsalavoutas and is co-funded with ACCA. It examines companies’ accounting policies and reporting practices on the wider area of intangible assets’ recognition, with a particular focus on software development costs. The project examines the determinants of software costs capitalised and any differences in reporting practices across industries and countries. 

Research report: The Capitalisation of Intangibles Debate: Software Development Costs

Project 6 

Companies’ readiness to adopt IFRS S2 climate-related disclosures

This project was led by Dr Diogenis Baboukardos and is co-funded with ACCA. We focused on companies in two industries (Construction materials and Chemicals – the 50 most polluting firms from each industry). We consider that these face significant risks due to climate change but also contribute negatively to climate change owing to their high levels of greenhouse gas (hereafter GHG) emissions from their operations. The main objective of this project was to compare companies’ current reporting practices with those proposed by the ISSB’s ED IFRS S2. Through reviewing current reporting practice this analysis gauges the extent of ‘preparedness’ of companies in these industries to provide the disclosures proposed in ED IFRS S2. 

Research report: Companies’ readiness to adopt IFRS S2 climate-related disclosures.