Posted on October 7, 2024 by Editor

The International Forum of Accounting Standard Setters (IFASS) held a meeting in London, with a session dedicated to the International Accounting Standards Board's (IASB) research project on intangible assets. The IASB, which added this project to its agenda in April of 2024, is now focused on defining the project's scope and exploring how to stage the work to improve this aspect of reporting.

At the meeting, national standard setters like the Australian Accounting Standards Board (AASB) and UK Endorsement Board (UKEB) presented their ongoing research, highlighting stakeholder concerns about the insufficient information provided on unrecognised intangible assets, particularly those generated internally. The AASB emphasised gaps in disclosures on customer-related intangibles, while the UKEB's research stressed the need for clearer, more comparable information about companies intangible assets. These presentations confirmed the broad concern that financial statements do not adequately reflect the value-creating potential of intangibles.

IFASS members widely agreed that IAS 38, the current accounting standard on intangibles, is outdated and insufficient for addressing new types of intangible assets, such as cryptocurrencies or data assets. The meeting generated recommendations for the IASB: prioritising improved disclosures in the first phase of the project and then gradually addressing recognition and measurement issues. Members also urged the IASB to focus on qualitative and quantitative information about how entities generate value from intangibles, rather than solely focusing on their fair value.

The consensus at the meeting was that a phased approach, starting with disclosure enhancements, would be the most effective way forward. This would allow regulators and standard setters to modernise reporting while addressing stakeholder concerns in a timely manner. With clear agreement that this project represents a once-in-a-generation opportunity, IFASS members emphasised the importance of comprehensive improvements to the way intangible assets are measured and reported.

For further insights into these discussions, read the full new here.