INTHEBLACK November 2025 - Magazine - Page 42
F E AT U R E
Clear progress
on intangibles
Some company assets are highly valuable on paper, but for accounting purposes,
they’re worth nothing. The growing intangible assets conundrum is challenging
accounting standard setters, but clear steps forward are being taken.
Words Gary Anders
LAUNCHED IN STOCKHOLM IN 2008,
streaming service Spotify now has 678 million monthly
active users and hosts over 100 million songs as well
as nearly seven million podcast titles on its platform.
Spotify generates billions of dollars in revenue annually,
but how much are these prized digital assets, together
with Spotify’s technologies, trade names, relationships
and patents worth?
The answer, at least according to the company’s 2024
consolidated financial statements, is €48 million
(A$86 million) — a minuscule amount in the context
of Spotify’s total assets of just over €12 billion at
31 December 2024.
Under existing accounting standards, the values
of internally generated assets such as intellectual property;
brands; digital assets including software, databases
and domain names; human capital and organisational
knowledge; and contracts and relationships
are all intangibles that cannot be
recorded among a company’s
balance-sheet assets.
42 INTHEBLACK November 2025
A balance-sheet value can be placed on acquired
intangible assets from a takeover or merger, following
initial recognition these assets are carried at their cost
minus accumulated amortisation and impairment losses.
A TANGIBLE PLAN
It is now almost 25 years since the
accounting standard governing
the treatment of intangible assets
on balance sheets was
formalised in IAS 38
Intangible Assets.
