Intangibles

Introduction

The UK Endorsement Board has undertaken a comprehensive research project to consider how the accounting for, and reporting of, Intangible Assets could be improved to provide investors with more useful general purpose financial statements to assist them to make better informed decisions.

The project has:

Explored UK stakeholders’ views on the accounting for intangibles under International Accounting Standards.
Reviewed the nature and extent of current reporting practices for intangibles among listed UK companies using IFRS standards.
Engaged with investors to better understand their perspectives on the current and future reporting of intangibles in the financial statements.

In April 2024 the 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.

The UKEB’s research reports can be found on this page.

The UKEB will use the findings from its reports as an evidence base in its future work on intangibles. It looks forward to contributing to future discussions on the accounting for intangibles.

Pauline Wallace, Chair of the UKEB said

“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 page. The UKEB’s research will provide an important foundation for the UK’s response to this once in a generation opportunity for change”.

Introduction video to the reports

The Chair of the UKEB, Pauline Wallace, introduces the reports in a short video.

Summary brochure of the reports

The UKEB has published a summary brochure which provides an overview of key findings from the three reports.

Qualitative Analysis of Intangible Reporting in the UK

The UKEB published its report ‘Accounting for Intangibles: UK Stakeholders’ Views’ in March 2023. It sets out stakeholder views on the accounting for intangibles under International Accounting Standards within the context of the wider economic impact of intangibles in the UK.

Quantitative Analysis of Intangible Reporting in the UK

The UKEB published its report ‘Accounting for Intangibles: A Quantitative Analysis of UK Financial Reports’ in May 2024.

It provides an overview of the nature and extent of current reporting of intangibles by UK listed companies. The report

analyses the current reporting practice among listed companies, to examine how they account for intangibles (including capitalisation and expensing), together with any associated disclosure;
looks at the relationship between acquisitions and intangible assets recognition, providing evidence on the extent to which intangible assets are recognised, predominantly as a result of business combinations
provides an estimate of intangibles expenditure potentially not recognised as assets by UK listed companies.

Investor Survey

The UKEB published its report ‘Accounting for Intangibles: A survey of users’ views’ in May 2024. It explores, by means of a survey, users’ perspectives on the accounting for and reporting of intangibles in financial statements.

The survey addressed the economic importance of intangibles before examining in detail users’ reviews of the current IFRS accounting for, and reporting of, intangibles.

It also examined possible future accounting by presenting respondents with a range of different types of intangibles and considering possible future accounting treatments and disclosures.

The findings provide evidence about the views of investors and other users of financial statements, building on the earlier qualitative analysis report.

Other information

Background to the UKEB research project
UK Intellectual Property Office’s “Investing in innovation” event
- Seema Jamil-O’Neill, Technical Director at the UKEB, was a keynote speaker at the UK Intellectual Property Office’s “Investing in innovation” event on 19 March 2024. The event was hosted and addressed by the UK’s Minister for AI and IP Viscount Camrose at the House of Commons, and explored topics including IP financing and investment in the UK. Seema discussed the UKEB’s intangibles research project and the role of accounting in unlocking IP finance in the UK. It was clear from the discussion that followed that there is broad interest in the reporting of intangibles in the UK, and the work of the UKEB. Seema’s speech in full can be accessed here.