IAS International Accounting Standard
Currently, the International Financial Reporting Standards (IFRS), the International Accounting Standard (IAS) and Statement of Financial Accounting Standards (SFAS- US Standard), which are commonly followed in must country, do not allow for businesses to recognize most internally-generated intangible assets on their financial statements. Only externally-acquired assets (i.e., those obtained through a business consolidation or other Merger &Acquisition transaction) will necessarily crop up in financial reporting documents. As a result, regular and reliable determinations of where intangible value is or is not being generated and utilized are unavailable, frustrating both entity and interested stakeholder efforts at evaluating a business’ resources, management, and worth.
Intangibles capital is important to both society and organisations. It can be a source of competitive advantage for businesses and stimulate innovation that leads to wealth generation. Technological revolutions, the rise to pre-eminence of the knowledge-based economy and the networked society have all led to the realisation that successful companies excel at fostering creativity and perpetually creating new knowledge. Companies depend on being able to measure, manage and develop this knowledge. Management efforts therefore have to focus on the knowledge resources and their use. Intangibles and how they contribute to value creation have to be appreciated so that the appropriate decisions can be made to protect and enhance them. There must also be a credible way of reporting those intangibles to the market to give the
Investment community comprehensive information to assist in valuing the entity more accurately investment flows in intangibles do not appear as positive asset values on financial statements, so the traditional accounting model does not represent them in a meaningful format.
But financial statements should be seen as only a part of the jigsaw in how companies assess and communicate value. The finance function has a key role to play in managing knowledge assets and understanding and communicating sources of enterprise value. It may take a while to reach a consensus on what constitutes the best model for managing and reporting intangible value drivers.
The BIOXPARC project aim is contribute to application on best practice and arrive at a point of convergence between the disparate approaches