UKEB is seeking views on how the accounting for, and reporting of, intangible assets could be improved to provide users of financial statements, such as investors, with more useful information to help them make better informed decisions. This affects users of IAS 38 Intangible Assets under IFRS.

The cost of generating an intangible asset internally is often difficult to distinguish from the cost of maintaining or enhancing the entity’s operations or goodwill.

For this reason, internally generated brands, mastheads, publishing titles, customer lists and similar items are not recognised as intangible assets.

The costs of generating other internally generated intangible assets are classified into whether they arise in a research phase or a development phase. While research expenditure is recognised as an expense, development expenditure that meets specified criteria is recognised as the cost of an intangible asset.

In the UK annual investment in intangible assets is estimated to be roughly equal to investment in tangible assets, amounting to roughly 7.5% of UK GDP or nearly £170bn per annum.

Over the period 2008-2021, the carrying amount of intangible assets recognised by FTSE 350 companies significantly increased, from £115bn to £330bn (a 185% increase over the period).

Intangible assets are expected to form a key part of the International Accounting Standard Board’s (IASB) future standard setting agenda, and this is a chance for investors and other users of financial statements to contribute to the evidence that the UKEB is collecting on the topic.

The survey takes around 20 minutes to complete. Stakeholder comments are welcome until 15 October 2023.

Click to access the UKEB Accounting for Intangibles survey

Croner-i Navigate provides guidance, commentary and tools to assist with international financial reporting requirements. See the IFRS Quick Link and the IAS 38 section of Navigate IFRS Accounting for a selection of these resources.