EFRAG invites input on intangibles

Posted on September 3, 2021 by Editor

How can financial reports provide better information on intangibles? The European Financial Reporting Advisory Group (EFRAG) has published a discussion paper examining different approaches to this issue, with comments requested by 30 June 2022.

EFRAG observes that “the value relevance of financial statements is decreasing and that this could be due to financial statements not reflecting information about intangibles, which has become more important for more entities.” It is also difficult for users to compare entities that grow organically with those growing through acquisition, due to the greater accounting recognition of acquired assets compared with those that are internally generated.

The discussion paper looks at three approaches for better information on intangibles, considering the benefits and challenges of each. It also offers a number of questions for respondents. A key question for accounting standards setters the world over – but not an easy one. Hence the long time lines!

Read more here.

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