Wes Bricker on capturing intangibles
‘The Unbalanced Balance Sheet: Make Intangibles Count’ features in Accountancy Today this week. As Wes – who is Vice Chair – US and Mexico Assurance Leader at PwC and Chair of XBRL International’s Board of Directors – discusses, intangible assets such as brands, technology and customer relationships go unrecognised on balance sheets.
“This may have been OK at a time when companies created value through the deployment of vast collections of tangible assets, but today, most companies generate much of their value through intangible assets,” says Wes.
But why take this approach, and not simply allow intangibles to be discussed in other ways?
“Communicating this information as part of the financial reporting process, rather than through other avenues, subjects it to the rigor of the financial reporting ecosystem,” explains Wes. “Transformational changes to financial statements, such as recording and disclosing all or some internally generated intangibles, will help the financial reporting process keep pace with business innovation and remain relevant.”
Both the US Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are recognising the need for action in this area. Increasing investor interest in Environmental, Social and Governance (ESG) strategy also highlights certain – though not all – intangibles. In the meantime, Wes believes, it’s critical for company boards to determine how financial reporting can best capture the value created through intangible assets, and create visibility into management’s stewardship.
For more insights, read Wes’s full piece here.
And for more ideas from Wes, join us for Data Amplified Virtual on 14-16 April, when he’ll be giving a keynote on ‘Mind the Gap: Audit in a Digital Age.’
