NEWS11 May 2016

Call for change in reporting of intangible assets

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UK – Companies are failing to regularly appraise their intangible assets such as brands, people and relationships and internally generated intangibles aren’t recognised at all, according to a new report from Brand Finance.

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The Global Intangible Finance Tracker (GIFT), produced by Brand Finance in conjunction with the CIMA and IPA researches 57,000 companies across 160 jurisdictions and found that CFOs ( 58%) and analysts ( 68%) want accounting reforms to recognise intangible asset value.

More than 50% of analysts and CFOs felt brands were becoming increasingly important in risk management and lending decisions and over 70% felt brands were becoming increasingly important in M&A activity.

David Haigh, Brand Finance CEO, said: “Our ability to assess advertising effectiveness and intangible value has come on leaps and bounds, yet accounting standards and practices have not reflected this. With $30.5 trillion in intangible value undisclosed and growing annually, a revolution in the reporting of intangible assets cannot come a moment too soon.”

Brand Finance wants an annual revaluation of all company assets, including tangible assets, acquired intangibles and intangibles generated internally, arguing it would be a boon for boards, accountants, investors and analysts.