Intangibles - ICAS positioning paper and call for research
ICAS has issued a new positioning paper and call for research which sets out the key issues and questions on the topic of intangibles.
As the global economy has moved from manufacturing to service-based, there has been increasing focus on the intangible drivers of value within companies, and how these act as indicators of the future value of a business.
At the same time, concerns have been voiced that financial statements are losing their relevance as they do not reflect many of these intangible elements.
The ICAS paper uses the term ‘intangibles’ to include a potentially wide range of assets and other factors that drive the creation of value in companies, whether or not they are currently recognised or reported in annual reports and financial statements.
The paper considers the current accounting framework for intangibles, the growing importance of intangibles to companies’ business models, the rise in non-financial reporting and the increasing focus on long-term sustainability.
The central argument is that the front end of annual reports and non-financial reporting around intangibles are key.
The issue is not about reconciling net asset value and market capitalisation for companies, but rather how to provide information on a company’s intangible value drivers and how they support and impact the performance and sustainability of its business model.
In essence, how to provide information on those factors which are core to the creation of current and future value, and report on how these are being maintained and developed to sustain innovation and value creation into the future.
The objective of the paper is to outline the complexity of the issues around intangibles and to suggest areas where research could help to move the debate forward.
The paper calls for formal research funding applications for projects addressing the topic of intangibles. The deadline for applications is 30 September 2019 – for further information please contact the team.
Intangibles – a positioning paper and call for research
