IVSC issues new guidance on intangibles

New guidance is to be issued aimed at improving the quality of information in audited accounts on the value of intangible assets. The guidance, from the International Valuation Standards Council, covers areas such as brands, intellectual property and customer relationships. This follows a recent study, Accounting for Acquisitions, from the Financial Reporting Council, that concluded that there was a need for improved compliance with the disclosure requirements of International Financial Reporting Standards, with particular criticism of goodwill and intangibles. The FRC said it hopes its study will be 'a catalyst for boards of directors, audit committees, accounting team and auditors to consider the accounting for acquisitions more carefully'. Chris Thorne, chairman of the IVSC, said the council 'will shortly be publishing a revised guidance note on the valuation of intangible assets that identifies and defines the principal approaches and methods used in intangible asset valuation.' He added that the objective was 'to promote understanding of the primary recognised techniques and to promote consistent terminology in order to promote good practice and make valuations of intangibles more comprehensible to investors around the world'. The IVSC also intends to introduce additional guidance on valuing intangibles under International Financial Reporting Standards later in the year after the International Accounting Standards Board has concluded its current project on fair value.
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