Date of Graduation


Document Type


Degree Name

Doctor of Philosophy in Business Administration (PhD)

Degree Level





Vernon Richardson

Committee Member

Rodney Smith

Second Committee Member

Gary Peters

Third Committee Member

Deborah Armstrong


Social sciences, Applied sciences, Business value of information technology, IT expenditures, Intangible assets, Productivity paradox, information technology expenditures


The current accounting measurement and reporting system is ill-equipped to provide intangible investment information that is decision useful for stakeholders in the information economy. Potentially relevant intangible items are not reported on the balance sheet, since current standards mandate the immediate expensing of these intangible items. Presumably FASB's uncertainty with the fundamental issues of extent and timing of future benefits to the firm has led to concerns with relevance, reliability, and objectivity of capitalizing some intangibles, which results in potential long term value generating expenditures being immediately expensed on the income statement. Prior research has demonstrated extent and timing of some income statement intangibles, such as advertising and research and development, however the potential value of IT intangibles as an asset has not been investigated. This dissertation addresses issues on the accounting treatment for information technology (IT) expenditures and includes two parts. The first part contains an essay discussing the business value of IT expenditures using a rational economic argument to propose the capitalization of IT expenditures as an appropriate accounting treatment. The second part is composed of an essay that proposes statistically reliable amortization rates for intangible IT expenditures followed by a value analysis of the proposed accounting treatment. This dissertation provides information about the business value of capitalized information technology. The results of this study could help standard setters (FASB, IASB), other policy makers and regulators (SEC, Fed Res Board), firm managers, and financial statement users refine standards for intangible assets, specifically information technology.