INTHEBLACK November 2025 - Magazine - Page 44
F E AT U R E
“Companies should be encouraged to talk more about their
intangible assets — in annual reports, investor presentations
and board discussions. That way, stakeholders can better
understand what these assets are, what they’re worth and
how they’re being protected.”
FRANCES DRUMMOND, DELOITTE
“We’ve been working with the Australian
Institute of Company Directors over the past
two years to encourage more conversations
around intangible assets,” she says.
“We’re urging board directors to ask more
questions and push management to explain
how these assets are composed.
“There’s a lot of undisclosed value out
there, and worse, much of it isn’t even
being discussed.”
Companies could start to address the
problem by including more information
in their annual reports, Drummond says.
“That would be a step in the right
direction. We’re not necessarily advocating
for mandatory disclosure of all intangible
assets on the balance sheet — that would
be a huge burden.
“This topic has been under global
discussion for over 20 years, but progress
has been glacial. Still, companies should
be encouraged to talk more about their
intangible assets in annual reports, investor
presentations and board discussions.
That way, stakeholders can better understand
what these assets are, what they’re worth
and how they’re being protected.”
Dr Michael Falk, chief economist at
IP Australia, says intangibles are an
increasingly significant driver of value
for many businesses across a range of
industries, and underpin economic and
productivity growth.
“Our Australian IP Report 2025 suggests
businesses that are savvy in managing
their intellectual property as part of their
business strategy achieve stronger economic
outcomes,” Falk says.
“For example, businesses that are proactive
in how they engage with the patent system,
taking advantage of its flexibility to speed up
application timeframes, commercialise more
innovative products and realise more lifetime
value from their intangible assets.
44 INTHEBLACK November 2025
“Intellectual property (IP) rights also act
as a valuable shock absorber for businesses
facing rapid change in global markets.
For example, during periods of uncertainty,
businesses may be able to use IP rights as
a store of value, recouping their investments
in intangible assets later by licensing or
trading their IP.”
Michael Masterson, principal of boutique
advisory firm Intrinsika, which specialises
in identifying, securing and leveraging
the intrinsic assets in businesses, says the
accounting definition of intangibles is too
limiting and does not reflect real value.
“For example, accountants might say
data is worth zero — or worse, lump it into
‘goodwill’, which is essentially a placeholder
for ‘we don’t know what this is worth’.
Goodwill is rarely broken down or explained,
which is unhelpful for anyone trying to
acquire or understand the asset.”
It’s not just about the things “you can’t
kick with your toe”, Masterson says, it is
about identifying the core elements that
drive real value.
SIGHTS ON SINGAPORE
As the IASB deliberates on the accounting
treatment of intangibles, one reference point
could be Singapore’s intangibles framework.
In late 2023, the Intellectual Property
Office of Singapore (IPOS) and Singapore’s
Accounting and Corporate Regulatory
Authority launched the voluntary Intangibles
Disclosure Framework (IDF). It was designed
for companies to disclose and communicate
the value of intangible assets including brands,
patents, registered designs, human capital
and other internally generated intangibles.
“The IDF is part of the Singapore IP
Strategy (SIPS) 2030 and is a key step
to help enterprises commercialise their
intangible assets,” notes Indranee Rajah,
Singapore’s Second Minister for Finance.
