Accounting,
financial and legal issues
concerning Intangible Assets
Sweden
Denmark
Netherlands
United Kingdom
France
Germany |
Italy
European Commission and European
organisations
OECD
International
accounting organisations
US financial organisations |
1. Accounting and Business communities in Sweden
The Konrad Group and its "invisible balance sheet"
Swedish managers have been precursors in the field of intangibles. In fact, it is in Sweden that a group a 7 persons decided to work on this issue. They formed the Konrad Group (they called it the Konrad Group because they first met on November 12, 1987 and November 12 is Konrad Day in the Swedish calendar). They issued a fist publication in January 1998 entitled the"New Annual Report" and issued their final report in 1989 presenting the first method on intangible measurement "The Invisible Balance sheet" Den Osynliga Balansräkningen Ledarskap 1989, w. "Konradgruppen". The publication presents key indicators for accounting control and valuation of know-how companies. It has had a major impact on Swedish companies which started at the end of 1980's to identify, value and report on their intangible assets.
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Members of the Konrad Group
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Karl-Erik Sveiby case
Involved in the Konrad Group, Karl-Erik Sveiby has also been a precursor. Together with the Konrad Report, Sveiby presented its theory about "Knowledge Capital" in 1988, dividing it into three categories: Customer Capital, Structural Capital and Human Capital.
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Contact Karl-Erik
Sveiby - Sveiby Knowledge Management |
The Skandia Case - IC-Navigator
Also in Sweden a company was the first in the world to develop an integrated intellectual capital model allowing to define and classify intangibles not shown in the balance sheet: Skandia, a financial services company.
In fact, in 1991, Skandia started an intellectual capital project based on the work of the Konrad group. This project was led by Leif Edvinsson, also the world’s first corporate Director of intellectual capital. This project has resulted in the IC-Navigator. Since 1994 Skandia uses non-financial ratios and publish them in its annual reports.
IC-Navigator is considered as a key reference for companies. This model has also gained a world-wide recognition. Skandia actively promotes its IC-Navigator. It is now one of the driving forces in the "Intellectual Capital Movement" that is growing in momentum world-wide.
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Contact Leif
Edvisson and Skandia UNIC
Universal Networking Intellectual
Capital |
Following these different impulses, Swedish companies started to measure and report some of their intangible assets according to Swedish models as well as foreign theories which are being developed, in particular the Balanced Scorecard of Kaplan and Norton.
Roughly speaking, there are now two schools in Sweden: the HCRA school and the Konrad school (and its variants through the IC-Navigator, the Balanced Score Board and other models such as those developed in Canada). They have a lot to share, in particular the objective to try to detect hidden costs, incomes, and values and increase the transparency of intangibles. But the Konrad/IC-Navigator/Balanced Score Board (BSC) are more focused on management control and business processing while HCRA model is more focused on human capital (human resource accounting (HRA) and cost/benefit analysis of human resources).
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The Konrad/IC navigator/ BSC Models school: WM-data (IT consultancy firm), Skandia AFS, KREAB (media and communication consulting firm), Jacobson & Widmark (technical consulting company), Ångpanneföreningen (technical consulting firm), FFNS, Awapatent, Komrev, Bohlin & Strömberg (consulting) and Lindebergs (accounting firm). Also, Celemi carried out the world´s first "Intangible Assets Audit" in 1995. Most of them have a web site with their annual reports on-line showing how they have developed their indicators and key ratios;
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the HCRA school: e.g. Telia, the Swedish National Telecommunication Company (both a human resource income statement and a human resource balance sheet), Kooperativa Förbundet (Swedish Cooperative Union), Sweden Post.
2. Governmental activities
In 1991, a government study was conducted that resulted in asking a special working group to formulate a government proposal for accounting. The report (DS 1991:45) discussed a proposal making it mandatory for all companies and authorities with more than 100 employees to work out Human Resources Accounting reports with profit and loss accounts every year (e.g., personnel turnover, sickness leave, training, and working environment). For various reasons, the proposal never reached the Parliament but it has been considered positive that proposed legislation was submitted to various bodies, increasing awareness in this matter.
The question of changes in the legislation has been reconsidered. After a debate in the Parliament, the standing committee on civil law legislation emphasised the importance of investigating the necessity of changing the legislation with respect to the treatment of human capital.
In 1993 the Swedish Council for Service Industries issued a recommendation for its member companies to use a number of indicators describing their human capital in their annual reports. The indicators were based on the Konrad design with additional input from Skandia. The recommendation was one of the inputs into the 1995 OECD and EU initiatives to issue recommendations for reporting on human capital.
Today, the Ministry of Industry, Employment and Communications supports several research projects in this field, including its participation within the MERITUM project and a model of an "IC Knowledge Desk for industrial growth" (work performed by Skandia Future Centre).
Intangibles will be on the Agenda of the EU Swedish Presidency
Sweden will hold the Presidency for the first six months of 2001. It is planned to hold an event on intellectual capital during this period on March 19-20 in Växjö.
Moreover, another workshop will take place in the framework of Work Life 2000. In order to prepare this event, the government has already organised a workshop in Brussels in February 1999 on "How To Manage And Account for Intangibles: Voluntary guidelines on the disclosure of intangibles: a Bridge over troubled water?". The workshops scientific organisers were Jan-Erick Gröjer and Ulf Johanson from the Stockholm University.
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Contact Swedish
Ministry of Industry, Emplyment and
Communications National
Institute for Working Life (NIWL) Workshops
Reports are available at: |
Danish activities concerning accounting are closely linked to the Danish IA agenda (The Danish Intellectual Capital Statements Pilot Project). Please jump to IA agendas pages.
In 1998, the Government, in particular the Ministry of Economic Affairs, launched an "Intangible Assets pilot project" on intellectual capital reporting in association with four firms of accountants. Named "Balancing Accounts with Knowledge", it shows that intellectual capital reporting is feasible.
The Minister announced the launch of the project "Balancing accounts with knowledge" as follows:
"The Ministry of Economic Affairs will be launching a pilot project to allow accountants to gain experience with alternative methods of "valuing" intangible commercial assets. More specifically, one or two accountancy firms will be given the opportunity to acquire experience in compiling "annexes to annual company accounts" using a number of existing methods. This newly acquired experience will, it is hoped, eventually persuade banks to weigh these assets more heavily when considering applications for finance. The results of this experiment will be described in a report which will be sent to parliament for information purposes."
The pilot project was prepared by approaching all the accountancy firms in the Netherlands via a tendering procedure to which the NIVRA (Organisation of Chartered Accountants) and the NOVAA (Organisation of SME-accountants) lent their support. Four firms were selected (Ernst & Young, KPMG, PricewaterhouseCoopers and Walgemoed). These firms were asked to develop a method for including intangible assets in their financial reporting. They were then asked to apply this method to three of their clients, who should preferably be knowledge-intensive companies. The accountancy firms were deliberately given complete freedom in their choice of methodology. This resulted in a range of methods which are briefly discussed in the next section.
The project was supervised by a monitoring group consisting of members of the accounting profession and from related sectors such as banking, institutional investment, the stock exchange and business and industry. This broadly based committee was appointed mainly to improve the external function of the annual reporting requirement. In particular, the project has been carried out in consultation and cooperation with the Royal Netherlands Institute of Chartered Accountants (Koninklijk Nederlands Instituut van Registeraccountants) and the Netherlands Order of Management Consultant Accountants (Nederlandse Orde van Accountants administratieconsulenten - NovAA).
The results of the pilot project were set out in a report "Intangible assets. Balancing accounts with knowledge" published in June 1999 in order to coincide with the OECD conference, "Measuring Intellectual Capital", which was organised in Amsterdam in cooperation with the Dutch Ministries of Economic Affairs and of Education, Culture and Science (see OECD pages).
The findings
The report gives a detailed description of the four methods. Each of the four firms chose a totally different approach, as originally intended by the project. The aim was that the Ministry of Economic Affairs should "familiarise itself with the entire field of play, without restricting itself to the official margins".
The shared conclusion reached by the studies was that the companies surveyed had the least objections to providing a combination of retrospective/non-accountable information for external reporting purposes. As regards prospective/accountable methods, the companies surveyed recognised a value mainly for their internal management processes, but were still extremely reluctant to use these for external reporting, due to strategic reasons and the possible tax repercussions of providing insight into intangible assets. However, the report does describe an instance in which a company gained an external benefit (namely more finance) from providing insight into its intangible assets. It was also found that financial analysts look more favourably on a liberal supply of (prospective) information. One company remarked that it was better for companies to publicise their own information themselves than for the outside world to speculate about it.
According to the Minister, a trend is currently visible, especially in the US, in which the provision of principally non-financial information concerning intangible assets is strengthening the position of employers on the labour market, which is short of knowledge-workers.
The conclusion must therefore be that it will only be possible to make new inroads with regard to external financial reporting if it is done as an extension to internal reporting. Ultimately, it may well be that pressure from external players (shareholders, financial analysts and banks) will force the publication of this information. The driving force behind this trend may then effectively shift from business-internal to business-external factors.
In order to continue to take part in the debate concerning intangible assets and transparency in the Netherlands, the Dutch government wants to encourage more attention to be given to the topic.
In fact, the Government tends to consider that if it does not act, there will be no spontaneous continuation of the work done:
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it feels that the initial impetus it has been provided will not be enough to persuade the private sector to continue the initiative of its own accord;
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if the topic has now become more and more widely discussed in academic circles, and is increasingly generating discussion and publications at both national and international level, it has not always resulted in more practical information for the companies themselves.
The government has suggested a number of follow-up actions which are designed to tackle the bottlenecks hampering the internal, external and social functions.
Follow-up actions concerning the "Internal function" : an Intangible assessment tool for SMEs and a promotional campaign for entrepreneurs
According to the fact that the pilot study "Balancing Accounts with Knowledge" analyses large and medium-sized companies, there is a need to cover SMEs for which the topic of intangible assets is different (in particular for start-ups companies).
The Ministry of Economic Affairs has decided in conjunction with NIVRA to commission the EIM to develop an assessment tool to measure the intangible commercial aspects of business management in a clear and objective way. This will give both entrepreneurs and financiers a better insight into the intangible aspects of companies. This can then help to make it easier for new and rapid secondary growth companies to attract financing. The aim is for the joint Ministry-NIVRA publication on intangible assets to be accompanied by an online assessment instrument. This instrument can help the entrepreneur to benchmark his score against the scores achieved by other entrepreneurs. Companies will then have a quick reference guide telling them what information finance providers value when considering an application for finance. The instrument can also help to improve internal business management.
The government will promote these concepts more widely in order to ensure that their use is more widespread. It will make entrepreneurs more aware of the importance of transparency within their organisation as a means of improving the way they operate.
Follow-up actions concerning "External function"
They will consist in the following :
Encouraging more involvement by other stakeholders
The government wants to conduct a study to find out how far external players, and especially financiers, shareholders, employers and employees, would appreciate more transparency in this area.
As a follow-on to the pilot study, which was fairly general in structure, the relevant ministries would like to hold further discussions with the aforementioned external players. The discussion could seek workable and comparable forms of transparency and explore ways of managing intangible assets. New forms of investment could also be discussed. These discussions will also promote more attention for the subject in a wider forum.
Comparability of intangible assets: framework and set of indicators
Based on the information gathered so far and based on the discussions that have been held with external players, a framework can be drawn up to enable a comparison to be made between companies. This framework can be based on internal and external indicators which make visible the intangible assets within the company. A possible framework would need to be tested for its applicability in consultation with companies and e.g. financiers. A next step would be to allow the companies to test the framework in practice on a voluntary basis.
Legal aspects
The government is not at present considering imposing more stringent statutory requirements on the capitalisation of intangible assets:
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the Government tends to believe that the interest in the subject - encouraged to some extent by the government - will be sufficient to encourage the gathering of information that is relevant to internal, and ultimately also to external, purposes;
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the Government also considers that the international developments in this respect will also encourage a growth in the provision of information in this area. International regulations and directives are a decisive factor in defining national legislation and regulations in the institutional framework. Therefore, it does not need to do more but just to follow closely to these developments, be they within IASC and at European level.
The Dutch Minister of Justice will make a statement to Parliament on the subject in the foreseeable future. More details on this agenda on Netherlands pages.
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Contact Minister
of Economic Affairs The Report "Balancing Accounts with Knowledge" can be downloaded on Minez web site : http://info.minez.nl/pdfs/25b19a.pdf |
Governmental agenda on accounting and company law (part of the UK agenda)
The Government is working with the City and industry to find ways of addressing gaps in finance provision and to improve methods of valuing intangible assets and communications between companies and their shareholders. The Accounting Standards Board has been asked to look again at the issue of intangible assets, while corporate governance issues are being considered further in the Government's Review of company law.
Therefore, the UK Accounting Standard Board (ASB) and Institute of Chartered Accountants in England and Wales (ICAEW) have been asked by DTI, in consultation with others, to look at the scope for better guidance on disclosure of intangible assets.
Four steps are planned:
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Request that ASB look at scope for guidance on disclosure and include the project on their annual work-plan (Achieved);
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ASB to consult the accountancy profession on general issues (Achieved);
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ASB begin work with Institute of Chartered Accountants in England and Wales (ICAEW) in light of initial responses from profession (Achieved);
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Initial findings and draft guidance to be issued by ASB/ICAEW along with proposals for any further work. Planned for July 2000.
This task will be particularly difficult in the UK because of ASB traditional approach and because of the companies' culture.
In fact, a survey on information asset valuation in UK companies conducted by researchers from the Loughborough University (Charles Oppenheim, Joan Stenson and Richard M.S. Wilson) shows interesting findings. This survey has been carried out through a series of interviews with accounting and information professionals, and with representatives of their professional and regulatory bodies between January and December 1999. The aim was to identify a method of valuing information assets, which would allow them to be included on the balance sheet of UK companies.
The valuation method investigated in most detail was that recommended by the UK Accounting Standard for Goodwill and Intangible Assets FRS10 (Financial Reporting Standard - Accounting Standards Board, 1997). FRS10 required that from the end of 1998, UK companies were permitted to capitalise their intangible assets as long as those assets have "readily ascertainable market value".
The obstacles to achieving a valuation of information assets are the following:
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FRS10 is still an unsuitable method for the valuation of information assets because it requires companies to apply strict criteria when recognising intangible assets (and researchers found no companies in the UK that are currently using FRS10 to account for information assets).
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but more fundamentally, the main obstacle is related to the identification of information assets and their attributes. "We found that very few companies held a register of their information assets, or had taken steps to identify or assess them at an organisational level. Without this first step, a valuation was extremely difficult". Thus according to the survey, "As a result, there is little impetus to identify and assess information assets internally or report them externally (…) Until information assets are widely identified and assessed by UK companies, few will be able to realise the financial gain which companies like Skandia in Sweden and Dow Chemical in the USA have achieved. While intellectual capital and knowledge management initiatives have gone some way towards popularising the need for better management of information assets, on a practical level we have found that there is little real understanding in the UK of the potential of information assets for wealth creation."
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Contact DTI
Company Law and Investigations
Directorate ASB ICAEW: http://www.icaew.co.uk/ |
A "Modern Company Law, For a Competitive Economy"
According to the UK Government, the national current framework of company law is essentially constructed on old foundations dated form the Victorians in the middle of the last century. The following additions, amendments and consolidations have resulted in a complex patchwork of regulation which is "seriously out of date". The resulting costs and problems are real and substantial nonetheless.
Therefore, the Government has decided to launch a thorough and wide-ranging review of the core company law. It has implemented a Steering Group to monitor this Review. It is chaired by Richard Rogers, Director, Company Law and Investigations at the DTI.
The following steps have been undertaken:
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In March 1998, a consultation paper has been published. It outlined scope and arrangements and terms of reference for the Review;
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In February 1999, the Steering Group has published the first strategic consultation document ‘The Strategic Framework’. It described work to date, issues identified and analysed, and proposals for taking work forward;
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In October 1999, the Steering Group issued three further consultation documents on specific topics;
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In March 2000 the Steering Group issued its second strategic consultation document 'Developing the Framework'. It analysed and made proposals on key areas of governance of companies and on SMEs, including disclosure and transparency rules.
In this report, we can read that:
"Companies are increasingly reliant on qualitative and intangible, or "soft" assets such as the skills and knowledge of their employees and their corporate reputation. The reporting framework must recognise this and ensure that companies provide the markets and other interests with the information they need to understand companies' business and assess performance."
Deadline for answers is 15 June 2000 and new chapters are scheduled for July 2000.
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Contact Department
of Trade and Industry |
2. The leading role of the Institute of Chartered Accountants in England & Wales - Centre for Business Performance
The Institute of Chartered Accountants in England & Wales is the largest professional accountancy body in Europe, with over 116,000 members. Working in the public interest under a Royal Charter, its primary objectives are to educate and train Chartered Accountants, to maintain high standards for professional conduct among members, to provide services to its members and students, and to advance the theory and practice of accountancy.
Interest for Intangible assets has been high since some years. As an example, ICAEW has been associated to the International OECD workshop on intellectual capital. It has also published some studies and organised workshops on this topic, via, in particular, its Centre for Business Performance.
In 1999, ICAEW has launched a project called 2020 Vision Project. The aim is to explore the challenges likely to be faced by leading businesses in the first decade of the new millennium, and the way in which such businesses will relate to providers of human, intellectual and financial capital and to their political environment. Of particular interest is the growth in importance of intangible assets and the issues that boards of major companies should be considering.
The 2020 Vision Project involves a Steering Group comprising senior members of the business and financial communities.
In the project's framework, ICAEW's Centre for Business Performance has published a book entitled "Human Capital and Corporate Reputation: Setting the Boardroom Agenda". It is a collection of contributions by leading business people, personnel experts, academics and accountants. It provides views on the way that boards should be addressing the growing importance of intangible assets such as human capital and reputational capital, and on the measurement, management and reporting on such assets. The publication is available on ICAEW web site.
Other projects are scheduled in the framework of the 2020 Vision Project in 2000 :
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a high level roundtable to discuss issues relating to human capital;
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determination of appropriate research projects on intangible assets;
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a conference for young business leaders of the future, likely to be held at Chartered Accountants' Hall in late 2000.
The launch of the book has offered an opportunity to the newly elected President of ICAEW, Graham Ward (who is also Chairman of the 2020 vision project steering group), to reaffirm the importance of measuring and reporting on intangible assets.
During the press conference held in June 2000, Graham Ward said that cultivating and measuring the "great intangible" of human capital was the next major challenge for both company boards and their accountants He argued that a deliberate strategy is now required: "those businesses that fail to develop one will go the way of the dinosaurs". He also called on accountants to develop vital measurements of value in this area. "Measuring intangibles like human capital may seem like a break with my profession's traditions but it's essential to building Britain's sustainable economic success. People are now the key drivers of profitability. However, this reality and its implications for the way we do business are poorly appreciated by British companies and accountants. The key is to promote informed discussion amongst investors and to create new measurements that confirm value".
According to ICAEW, five steps are urgently needed:
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Detailed reporting to help investors understand how human capital builds long-term corporate value. This should cover the kind of people a company employs, their skills, training philosophy and investment, knowledge management systems and recruitment strategies. The Operating and Financial Review provides one vehicle for this;
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Developing agreed measurement techniques or benchmarks for human capital. Simply identifying and recording intangible assets and indicating their value would be a step in the right direction;
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Devising new strategies for creating and sustaining human capital, involving the creation of a learning culture within the company and links with the educational sector;
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Ensuring an ethical underpinning to corporate activities.
ICAEW has published others reports and a newsletter concerning intangible assets:
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"New Measures for the New Economy" - C. Leadbeater, 2000
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The Treatment of Goodwill and Other Intangibles: Theory, Standards and Practice in France and the UK -
S.
Archer, D. Alexander, L. Collins and D. Pham, 1995
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The 21st Century Annual Report :
in 1998,
ICAEW has presented an "interactive prototype" of how
the annual report could look in the 21st Century which was
presented to the finance directors and chairmen of 160 Plc's.
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Contact ICAEW
- 2020 Vision Project Director: Anthony
Carey |
1998 law has opened the way for changes in the presentation of annual accounts in France. It has also created the new accounting standards' setting body, the Comité de la réglementation comptable – CRC. Besides CRC, there is the National Accounting Council (Conseil National de la Comptabilité) which is a consultative body. At this stage, work on intangible assets is still open. However, one can note the following :
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in France, there has been since several years some innovations such as the "Annexe" to the annual report and the Bilan Social.
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in 1987, the National Accounting Council has created an "Commission on intangible investments" which took the form of a working group (Commission des Investissements immatériels) chaired by Isabelle de Kerviler. It was asked to define an accounting methodology allowing to identify commercial expenditures, which accumulate under the form of intangible assets. Some studies had shown that the commercial capital of a firm was largely unknown, resulting in management and financial difficulties. In a first phase, the Commission has worked on a general methodology aiming to improve the recognition in accounting of intangible assets developed internally. The objective was to allow, within certain limits and conditions, the inclusion on the assets side of some expenditures in intangible investments. Then, the Commission decided to restrict its reflection to specific intangible investments and, in particular, to investments in brands because of its being a strategic and controversial issue. In fact, brands are considered as the most tangible of intangibles.
A report has been issued in 1995 entitled "Brands: an asset for the company?" (Les marques: un actif pour l'entreprise - Rapport de synthèse sur la comptabilisation et l'évaluation des marques développées en interne" - Ministère des Finances). The report has made some proposals tending to give an accounting recognition of brands. However, these proposals have never been officially examined by the CNC. The objective was first to launch a debate on these issues. Today, the Commission does not exist anymore.
Today, most of the work on accounting for intangible assets is done at the EU and international level. However, there is still an interest in this matter.
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Contact Conseil
national de la comptabilité |
Concerning accountants who has an expertise regarding IA, Hervé Stolowy is professor and researcher in accounting at HEC School of Management Department of Accounting and Management Control. Hervé Stolowy (stolowy@hec.fr) has written and participated in several books. Among its recent working papers on intangibles, one can note:
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"Accounting for Brands in IAS 38 of IASC (Intangible Assets) Compared with French and German Practices - An Illustration of the Difficulty of International Harmonization" (August 1999);
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"How Accounting Standards Approach and Classify Intangibles - An International Survey" for the Annual Meeting of the European Accounting Association, Bordeaux, France (May 1999).
There have been recent developments concerning adoption of IASC standards. New law from 1998 aimed at making the capital markets more competitive, allow companies whose securities are publicly traded to prepare their consolidated financial statements, for domestic reporting purposes, using International Accounting Standards or US GAAP rather than their national standards.
Also, in 1998, Germany created a new, independent German Accounting Standards Committee (Deutsches Rechnungslegungsstandards Committee or DRSC), based in Berlin. This latter has implemented a working group on Intangible Assets: Arbeitsgruppe "Immaterielle Vermögenswerte" with the following members:
Project manager: Dr.
Gabi Ebbers DRSC
Chairman: Prof. Dr. Klaus Stolberg - KPMG
Members:
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Prof. Dr. Wolfgang Ballwieser Seminar für Rechungswesen und -prüfung
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Dr. Torsten Ganske - Deutsche Telekom AG
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Guido Kerkhoff - Bertelsmann AG
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Dr. Heinz Kleekämper - Ernst & Young Deutsche Allgemeine Treuhand AG
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Contact German
Accounting Standards Committee |
European Commission and the European Accounting Association
European Commission
These issues of intangible assets are also monitored by Internal market DG, in particular in Company Law, Accounting and Auditing which tends to modernise EU accounting rules. The Internal market DG has implemented a Contact Committee and Technical Committee which meets regularly to discuss matters particularly relating to International Accounting Standards. The impact of the Single European Market has also recently been analysed in a consultancy report for DG XV, emphasising that "the single market programme indirectly boosted the exploitation of intangible investments" (The Single Market Review, Subseries V: Impact on competition and Scale effects, 1998).
On June 13 2000, the European Commission has outlined a strategy for future financial reporting in Europe in a Communication it has just adopted. The strategy aims to eliminate remaining barriers to cross-border trading in securities. It recommends that there is one set of accounting standards so that company accounts throughout the European Union are more transparent and can be more easily compared. A single set of standards should make it easier to compare corporate performance, to raise capital and to enhance investor protection. This strategy should participate in the creation of an integrated market in financial services that is the aim of the May 1999 Financial Services Action Plan. The Lisbon Summit also insisted on the importance of the comparability of financial reporting to the creation of an efficient, deep and liquid securities market in Europe. The Commission believes that the adoption of International Accounting Standards (IAS) are the way forward.
The Communication announces that the Commission will come forward with proposals before the end of 2000 which would require all EU companies listed on a regulated market to prepare consolidated accounts in accordance with International Accounting Standards. This requirement would enter into force at the latest from 2005 onwards. Member States would be allowed to extend this requirement to unlisted companies and for preparing individual accounts. Since transparency and comparability are of particular importance for financial institutions, this policy will also cover listed banks and insurance companies.
The European Commission is also funding a Research project on Measuring and Accounting Intangible Assets (see European Commission activities - MERITUM project).
The European Accounting Association (EAA)
Established in 1997, the EAA links together the community of accounting scholars and researchers in Europe in order to foster, improve and disseminate European accounting research.
Providing a platform and a forum for European researchers and encouraging the emergence of networks, the EAA has a important impact on the accounting research community. Among topics covered, intangible assets hold an important place.
It organises an annual congress with approximately 1,000 people attending the presentation of around 300 papers on current issues and trends. The topic of intangible assets is regularly addressed. In 1999, the congress was held in Bordeaux (France). In 2000, it was held in Munich on March 29-31. Examples of papers presented on intangible assets:
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Is Accounting Information Loosing Relevance? Some Answers from Spain
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Management, Control and Valuation of Intangible Assets: the Case of Brands
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Intellectual Capital: Current Issues and Policy Implications
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Intangible Assets: The Auditability Viewpoint
In 2001, it will take place in Athens (Greece) and in 2002 in Copenhagen (Denmark).
The EAA has also a quarterly journal, the European Accounting Review (EAR), a leading academic journal which reflects the wide range of research interests and styles in the different countries of Europe. The European Accounting Review has launched a Call for papers for a Special Section on the Intangibles and Intellectual Capital (deadline: 30 September 2001, www.eaa-online.org/pub/call.cfm#intangibles).
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Contact EAA
Secretariat - EIASM |
Please jump to OECD activities, in particular those related to corporate governance.
International Accounting Organisations
Please jump to International Accounting Pages to read information about The International Accounting Standards Committee (IASC) and The International Federation of Accountants (IFAC).
American Institute of Certified Public Accountants
The U.S. AICPA initiative has resulted in the Jenkins Committee Report - "Improving Business Reporting, - A Customer Focus. Meeting the Information Needs of Investors and Creditors - Comprehensive Report of the Special Committee on Financial Reporting". The report is available of AICPA web site: http://www.aicpa.org
Financial Accounting Standards Board (FASB)
The mission of the Financial Accounting Standards Board is to establish and improve standards of financial accounting and reporting for the guidance and education of the public, including issuers, auditors, and users of financial information. It has published several statements on Business Combinations and Intangible Assets available on FASB web site.
U.S. Securities and Exchange Commission activities (US SEC)
The US SEC held a symposium on intangible assets in April 1996. The agenda for the symposium covered topics such as the nature and types of intangible assets, including intellectual property, human capital, software and related items. Discussion at the symposium centred upon the types of companies that utilise intangible assets, the importance of these assets from the perspective of investors and other users of financial reporting, and the sources of information relating to intangible assets. Participants also discussed issues related to the measurement of intangible assets by writers of financial reports, concerns about disclosures related to intangible assets, academic research pertaining to such assets, and the experience of U.S. and foreign standards setters with regard to accounting and disclosure of intangible assets. More information on intangible assets issues on the US SEC web site.
"Digital economy 2000" of the US Department of Commerce stresses the importance of intangible assets
In June 2000, Vice President Gore and U.S. Secretary of Commerce William M. Daley released Digital Economy 2000, the Commerce Department's third annual report on the information-technology revolution and its impact on the economy. A chapter entitled "what is new in the new economy?" refers for the first time to intangible assets treatment. Written by Lee Price, chief economist at the Department of Commerce, it is asked: "after software, should other intangible investments enter the national accounts?" (page 67). One can read: "much as businesses expert to earn a return on their investments in software over several years, business spending on intangibles such as training, workplace reorganisation and consultants can also be viewed as investments with long-term pay-offs". Lee Price remarks that the Federal Reserve Board Chairman Alan Greenspan recently urged that the national accounts go beyond software to include other intangible investments. "The treatment of business spending on other intangible investments could have significant effects on a range of measures central to our understanding of the economy." The report "Digital Economy 2000" is available for downloading at: http://www.esa.doc.gov/de2000.pdf