Getting tangible on intangibles: IVSC kicks off multi-part series
“Intangible assets have long been the engine for value creation in the world’s developed economies,” says the International Valuation Standards Council (IVSC). Companies’ investment in intangible assets, and investors’ ability to identify companies able to make the best return on these assets, are critical. Yet, “despite the importance of intangible assets to the capital markets, only a small percentage are recognised on balance sheets, typically via acquisition from a third-party transaction.”
The IVSC is publishing a series of perspectives papers aiming to support discussion on this topic, and to contribute to a realignment of accounting and reporting standards to better reflect current reality. It will explore questions around the kind of enhanced intangible asset framework that could potentially be developed. These include what its goals should be; what intangibles could be included; and whether it should be based primarily on enhanced disclosures, capitalisation, or value creation concepts and measurement.
The first paper, on ‘The case for realigning reporting standards with modern value creation,’ is now available; the next will explore categories of asset and how they create value. The IVSC is also welcoming feedback at any stage, so get in touch if you have ideas.
Read more here.