Survey Results on Accounting for and Managing Intangible Assets

Accenture research shows that, on average, 60 percent of a company’s stock value is tied to expectations of future value, even as the majority of assets that companies now own are intangible. To plan and mange for future growth, the accounting for and management of intangible value components—such as brand, intellectual property, knowledge and human capital, innovation capability, customer loyalty and reputation—is a critical yet largely unknown discipline.

In September 2003, Accenture conducted a global survey of senior executives in conjunction with the Economist Intelligence Unit on the value management of strategic assets both tangible and intangible.

How do companies manage and account for intellectual capital and intangible assets when traditional value-based management is focused on fixed assets? If intangible assets account for a significant share of future value creation expectations, how do companies manage for future growth?

Overall, executives believe intangible assets are of high importance to their companies' long-term shareholder wealth creation.

• Nearly half consider intangibles to be the primary source of shareholder wealth creation for their company.
  
  
• While the importance of intangible assets and intellectual capital is largely recognized, measurement of their performance, according to the vast majority of respondents, is lagging or even nonexistent.
  
  
• A considerable one-third of all represented companies do not measure the performance of intangible assets or intellectual capital at all.
  
  
• Intangible assets and intellectual capital are critical to the success of high-performing companies.
  
  
• Reflecting on their own companies, the majority of executives deem the comprehensive and integrated management of intangible assets and intellectual capital to be important to future success in creating shareholder value.
  
  
• Only half of survey respondents believe stock markets reward companies that invest in intangible assets and/or intellectual capital.
  
  

While businesses used to generate future growth through tangible assets like buildings and equipment, in today's services-based economy more businesses generate future value based on intangible assets such as intellectual property, corporate and brand integrity, customer loyalty, skilled workforce and leadership capabilities.

Yet our survey results show that while there's been a big shift toward intangible assets, most companies primarily measure only tangible assets.

By implementing systems to measure intangibles, there is a great opportunity for companies to enhance their business performance and create additional value.