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Accounting Standards

UKEB publishes stakeholder report on accounting for intangibles

The UKEB said that the report provides an “important foundation” for future work it will undertake in response to the International Accounting Standards Board’s (IASB) proposed project on accounting for intangibles

The UK Endorsement Board (UKEB) has published the Accounting for Intangibles: UK Stakeholders’ Views report which outlines stakeholder opinions on the accounting for intangibles under international Accounting Standards in the UK.

The UKEB said that the report provides an “important foundation” for future work it will undertake in response to the International Accounting Standards Board’s (IASB) proposed project on accounting for intangibles.

According to the report, economically intangibles are an “important determinant of companies’ performance and outcomes in financial markets”.

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It highlighted that while there has been a “significant increase” in the economic value of intangibles over the last 15 years, this increase can only be inferred indirectly as many intangible items are “not recognised in national or company accounts”.

UK stakeholders involved in the production and use of general-purpose financial statements were interviewed for the report and highlighted concerns about current IFRS Accounting Standards.

The report also identifies a range of possible enhancements to the accounting suggested by stakeholders.

It showed that investors who are “primary” users of financial statements particularly support more detailed disclosures on expenditure related to intangibles and qualitative information about key intangibles.

While the report does not reflect an official position of the UKEB, it will inform its future work, including further research and engagement with the International Accounting Standards Board, and help it ensure that any future international standard reflects the views of UK stakeholders.

Pauline Wallace, the chair of UKEB, said: “Intangibles are becoming more and more significant for corporate performance, and it is essential to give users the information they need to make informed decisions.

“I want to express my gratitude to the authors of this study for being open to sharing their opinions on such a crucial subject. This is an important first step in making sure that the IASB considers UK perspectives and experiences when deciding whether to adopt any future standard on intangibles.”

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