What Is Digital Asset Software?

Digital assets refer to non-monetary assets owned or controlled by enterprises or individuals in the form of electronic data and held in daily activities for sale or in the production process.

Digital assets

Digital assets refer to those owned or controlled by enterprises or individuals, which exist in the form of electronic data, and are held in daily activities for sale or in

The network accounting, office automation, and electronic payment system platform in the Internet age make the current production methods have superior advantages than traditional production methods. However, in real life, they only rely on a series of "0" and " 1 "code. Although they are digital commodities, they reflect the nature of assets, so they may be called digital assets. The characteristics of this asset are: ^[1]

1. Digital assets are definable. ^[2]

As a special asset, the blind application of traditional accounting models to digital assets generated in the new economy often has inappropriate aspects. For example, the traditional first-in, first-out, last-in, first-out methods of inventory valuation under traditional accounting are taken in terms of quantity. Endless digital assets are not applicable. We believe that due to the different ways of acquiring digital assets, their confirmation methods are also very different. ^[3]

As the assets of an enterprise, how to calculate and account for digital assets is also one of the key issues in the research of digital asset accounting. In current accounting practice, the general method of measuring the cost of computer software products based on the historical cost principle is to count the research and development costs of commercialized software and the costs necessary to maintain the basic functions of the software as assets (such as intangible assets) , And allocate the cost to the product based on the estimated sales volume. This is in line with the principles of traditional financial accounting. Accounting information is objective and verifiable, which helps to eliminate subjective phenomena in wealth distribution but is measured at historical cost. Due to the uncertainty of the value of digital assets, the relevance of accounting information will Greatly reduced. Under normal circumstances, the market value of such assets will deviate from their development costs, especially when a product becomes the standard for the entire industry, or people's consumption habits are formed, and its value will be significantly higher than the development cost. The above discussion is only for digital asset development enterprises. As for the digital assets purchased by enterprises for their production and management needs, the valuation should be another matter. Here, there are still two cases for analysis. ^[3]

Accounting measurement of self-made digital assets

As mentioned earlier, most software development companies still use the original value to measure digital assets, and include the product development costs, product commercialization costs, and other related costs (such as upgrade costs) in the value of the product. This is based on the entire business process from research and development to sales to maintenance. The development cost constitutes the main body of the original value of digital assets. After the successful development of the product, many costs such as review and appraisal fees, registration fees, copyright fees, and processing fees are also part of the original value of digital assets. In addition, the cost of constantly adding product upgrades and the cost of auxiliary software that comes with the main product will also increase the book value of digital assets. This method of valuing by original value is objective and verifiable, which is convenient for accounting confirmation, and the accounting process also has vouchers, which is conducive to the performance of the asset storage responsibility. However, its shortcomings are also obvious: it is not suitable for operating and investment decisions; it cannot reflect the true financial status of the enterprise; it lacks measurement methods and consistency in time; it cannot reflect the gains from asset storage.

The use of future net cash flows for accounting measurement is more in line with the characteristics of digital assets. Therefore, how to reasonably determine the expected return of digital assets has become the key to this measurement model. In view of the similarities between digital assets and information products described in this article, similar pricing models for information commodities can be used to predict the future returns of digital assets. Many information economics believe that the cost of information production has nothing to do with the scale of the use of information, but the scale of the use of information and the expected benefits resulting from it are constraints on the price of information. In addition, the expected return of information is usually uncertain, and the price of information is not entirely determined by the supply and demand of information. Therefore, the price of information cannot be calculated using ordinary commodity prices. It is simply a model of cost plus profit, and the price is adjusted strictly according to the relationship between supply and demand. Relevant research shows that the price of information is unevenly affected by the buyer's and seller's markets, and the buyer's market is the main factor affecting the price of information.

For example: the buyer s assessment of the expected benefits of information products and their application scope greatly affects consumers purchase desires; the level of informationization of enterprises and society determines the demand for information products, but due to the marginal cost of copying information products It is almost zero. The increase in demand does not necessarily rely on the increase in the price of information to balance the demand. Instead, the expansion of production will cause the price to fall and cause the demand to increase again. This is an economy that is contrary to classical economic theory in the information economy Phenomenon; the technological development of competitors and the degree of development of market competition and monopoly also affect the behavior of buyers, thus indirectly affecting the price of information. In addition, the lower the probability that a buyer will find the required information product, the higher the willingness to pay for the information cost. The type of economic demand and non-economic demand of the buyer, such as psychological demand, will also affect the market price of the information product; Risk awareness and risk level categories also limit the price of information commodities. In practice, the buyer often reflects the combination of the above types of features, and finally plays a role through joint probability.

The seller's market plays a smaller role in the traditional price determination mechanism than the buyer's market. In addition to the seller's information production cost constraints, the seller's market price is also affected by the socioeconomic environment and technical conditions, the producer's productivity, production scale, and information industrialization Degree and many other factors.

In summary, we believe that the factors that affect the future returns of digital assets can be considered from the following aspects:

(1) Macroeconomic environment. If the entire social environment is stable, the economy is booming, the degree of information industrialization is high, the space for enterprise development is large, and the sales channels are wide, then the development and sales of digital assets have a good environmental guarantee.

(2) The market share of the enterprise. If an enterprise already has a certain market share in its industry, the enterprise will have a better market reputation, a stable consumer group, and the launch of digital assets will be more easily accepted by consumers, which will increase the possibility of gaining revenue.

(3) Human factors. From the perspective of the enterprise itself, digital assets belong to the intellectual achievements of human beings. Talents with comprehensive technology, innovative consciousness and pioneering ability are the key to ensure the competitiveness of the enterprise's digital asset market. From the perspective of consumers, their expectations of commodity returns , Estimation of application range, and risk appetite will affect the sales of digital assets and their returns.

(4) The management level of the enterprise itself.

Advanced management is an important factor in guaranteeing corporate profits. If the company has a group of high-tech talents, without a good corporate culture, strict management system and organizational mechanism, and a certain employee incentive mechanism, the operation of the entire enterprise will not be stable, efficiency will be affected, and the benefits of digital assets will also be affected .

In addition to the points mentioned above, the status of corporate competitors, the degree of market competition and monopoly will also affect the returns of digital assets. These factors should be fully considered when determining the expected returns of digital assets. Through a detailed market survey and analysis, a more reasonable income forecast is obtained, and the annual income after deducting operating costs is converted into the present value, which is the net present value of the future cash flow of the product.

This method of accounting measurement based on the net present value of future cash flows has largely avoided the shortcomings of original value measurement, reasonably reflects the economic value of the digital asset, and can provide information related to decision-making, but There is a lot of subjectivity in accounting treatment, such as the estimation of discount rate and income period, which affects the verifiability of accounting measurement. In addition, there is uncertainty about the quantification of the impact of other factors on product income.

2. Accounting measurement of outsourced digital assets

Compared with the accounting of self-made digital assets, the accounting of outsourced products is simpler. Enterprise digital assets are mainly used by companies to improve their operating and management efficiency. The original value can be used to measure the purchase price and related expenses incurred during the use of the asset into the digital asset. Cancellation, accounting treatment can refer to the implementation of intangible assets.