Accounting for Intangible Assets

The Australian Accounting Standards Board recently published an interesting discussion paper here on “Initial Accounting for Internally Generated Intangible Assets.”  Comments on the paper will be accepted here through May 15, 2009.

The paper addresses the peculiar state of affairs that exists in accounting today Read more

The Value of Intellectual Capital

A recent post by Pat Sullivan prompted salutes here by IP Think Tank and here by IP Finance. Basically, Sullivan says that the current financial crisis “busts an intellectual capital myth,” that the value of intangible assets is the difference between the market value of a company and its tangible assets. It is from this approach that many of us often say that 70-80% of the value of a company today is intangible.

Sullivan entreats his readers, “I hope the recent vertiginous slide in stock prices will cause you to reconsider.”

I’m not convinced. The market does not value companies by looking at their balance sheets. In most cases, it never has. But I have always found the comparison between corporate valuations and tangible book value to be a powerful way Read more

Training (and spending on intangibles in general) as an Investment?

Clive Shepherd asks whether spending on training is an investment in this thought-provoking post. He makes the comparison to spending on other kinds of business operations to highlight the challenges of going the investment route. Then he takes Read more

Intangible Cost, Not Value

At the recent conference on Intangible Assets at the National Academies, the discussion “Intangibles in the Firm” consisted of two presentations, one by Baruch Lev, Professor of Accounting and Finance at the Stern School at NYU, and the other by Ron Bossio, Senior Project Manager from the Financial Accounting Standards Board.

It is not surprising that the organizers of the conference turned to two accountants to explain the “state of the art” of intangibles in the firm Read more