accounting : the end game

Four reasons why the old accounting models don’t work and won’t ever be enough to measure the intangible economy

Today’s accounting systems keep track of certain types of financial transactions. (and mis-reports intangible financial transactions). There is a need to get good financial information about intangibles. But knowledge intangibles are a different kind of asset. It is hard to imagine a time when financial metrics alone will be adequate on their own to measure [...]

Intangible Investment Builds Value – A not so surprising review of the research

Intangibles are a class of asset that has always existed. But the importance of intangibles now eclipses all other asset classes because of the shift in our economy from the industrial to the knowledge era. New things make people nervous. And the easiest way to dismiss something that makes you nervous is to ask for [...]

Facing the Facts: You are already spending a lot of money on intangibles

We can say with great confidence that you are already spending a lot of money on intangibles. How do we know? Academics have been looking at the question for quite awhile. Here are places they have looked:

Why Are Intangibles Not On the Balance Sheet?

Up until the 1970’s, the consumers of financials—managers, analysts, investors and bankers—had a much easier job. They had three sets of information by which to measure their investments. Balance sheet. In those days, balance sheets did include all the important assets of a corporation and looking at the balance sheet gave you a good idea [...]

Measuring Intangibles: The Simple and Elegant Answer

A few years ago, a colleague from the Institute of Management Consultants, Michael Egan, approached me after I gave a keynote address on intangibles at the Institute’s annual conference. Michael’s firm built a platform a number of years ago that is used by industry association members to anonymously report benchmarking data. The postings by individual [...]

I-Capex Is the New Capital Expenditure

Capital expenditure (capex) is an accounting concept that has ingeniously supported the tangible economy for centuries. It allows a company to apply to its balance sheet the cost of investments in its future productive capability. This is called “capitalizing” an expense. Then the cost of this investment or capital is depreciated over a period of [...]

The New Accounting

The accepted wisdom inside the IC world is that we should ignore accounting and accountants—they will never “understand” what we are doing. I went along with that for a number of years, accepting the view of many that IC is special, it cannot be truly measured, that it must be appreciated. Well, I am way [...]