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Intangible Assets

Project Type:

Research

Status:

Active

Milestone:

Monitoring

In April 2024 the International Accounting Standards Board (IASB) announced that it was commencing its comprehensive review of accounting requirements for intangibles. The project will assess whether the requirements of IAS 38 Intangible Assets remain relevant and continue to fairly reflect current business models or whether the IASB should improve the requirements.

In response the UKEB has undertaken research focused on understanding UK stakeholders’ views on the accounting for intangibles and gathering evidence about the UK intangibles landscape.

Background

The IASB added a project on Intangible Assets to its work plan following feedback on its Request for Information: Third Agenda Consultation. Most respondents to the Request for Information recommended the addition of a potential project on Intangible Assets to the IASB’s workplan, rating it as a high priority.

In anticipation of an IASB project on intangible assets, the UKEB initiated a research project focused on understanding UK stakeholders’ views on the accounting for intangibles and gathering evidence about the UK intangibles landscape. To date, the UKEB has published three reports

The UKEB research concluded:

  • IAS 38 appears to be no longer wholly aligned with the current Conceptual Framework for Financial Reporting.
  • There are opportunities to enhance the accounting for intangibles. Users need high quality, comparable information and would prefer that to be in the financial statements and notes, rather than relying on other sources.
  • Users want more granular information about companies’ intangibles, and the expected benefits they can bring. This is particularly true for emerging intangibles.

UKEB research has featured in several international meetings, including the IASB’s Accounting Standards Advisory Forum (ASAF), and has been referred to in the IASB Board papers and meetings.

The IASB’s own research findings have been consistent with that of the UKEB, concluding:

  • “IAS 38 is out of date and in need of modernisation and futureproofing” to be capable of being applied to new types of assets (such as cryptocurrency) and new modes of operation e.g., cloud computing; and
  • “financial statements are not providing users with enough information about intangible assets or expenditure on intangible items” .

In response, the IASB tentatively decided in May 2025 to begin work on the Intangible Assets project by:

  • performing an assessment of user needs for information about recognised and unrecognised intangible assets, including expenditure associated with them; and
  • exploring whether to update the definition of an intangible asset, associated guidance and some aspects of the recognition criteria. This will be undertaken initially using, as test cases, application issues related to newer types of intangible assets and new ways of using them.

The IASB expects to undertake research through the remainder of 2025 and begin discussion on these work streams during 2026.

Outreach

In Q1 2026 the UKEB will engage with a range of stakeholders, utilising the case studies it is developing to conduct workshops.

UKEB Research 2025 - 2026

The UKEB is building on its previous work and undertaking research that complements the IASB’s current work, focusing on understanding what information about recognised and unrecognised intangible assets, including expenditure associated with them users would find useful. It would also consider preparer views on that information. By:

  • Developing case studies as a means of exploring users’ views on accounting for intangibles, and testing future IASB proposals (including recognition, measurement and disclosure).
  • Using both the UKEB and IASB case studies, undertaking interviews with UK stakeholders (including investors and creditors) to better understand their views on the accounting for intangibles.
  • In parallel, and supported by stakeholder research, work grounded in the IASB’s Conceptual Framework will begin to identify key elements that could support the future development of a more principle-based standard for recognition, measurement and disclosure of intangible items.

This work will contribute to ongoing engagement with the IASB and other stakeholders, including National Standards Setters. It will also provide a basis for ongoing UKEB discussions to develop relevant principles that could underpin future developments.

UKEB Research 2022 - 2024

In anticipation of the IASB’s review of intangible items, the UKEB decided to initiate a research project focused on understanding UK stakeholders’ views on the accounting for intangibles and gathering evidence about the UK intangibles landscape. The following reports were published based on the UKEB research:

The UKEB Chair at this time, Pauline Wallace, stated about this project:

“Intangibles make up a growing, and for some, extremely significant, proportion of the economic resources underpinning the growth in the value of UK companies, yet accounting standards have not kept pace. The UKEB’s research will provide an important foundation for the UK’s response to this once in a generation opportunity for change”.

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