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.

Financial markets rising

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.