Almost all CFOs and other users of financial statements want more, clearer information on IP in balance sheets, IASB survey finds

The International Accounting Standards Board (IASB) has just revealed the results of a survey it launched in October 2024 to address the question “Do financial statements provide sufficient information about intangibles?”

Almost all (94%) respondents to the IASB survey said that information about intangibles would be more useful if it was provided in the actual financial statements. Most cited the fact that such information would then be audited as the reason.

The IASB asked users of financial statements what information they are currently missing about intangibles. The international accounting standards setting body also wanted feedback to help it identify the issues it needed to address and hopefully solve in its ongoing Intangible Assets project.

Results of the survey were just released at the February 2025 IASB monthly meeting, in a staff paper prepared by the International Financial Reporting Standards Foundation (IFRS), the IASB’s parent body.

The most common reason (70% of survey responses) for preferring financial statements as a source was that the information in financial statements would be audited. Other reasons given included the availability and comparability of information on intangibles – if IP disclosure was a requirement when relevant, then all entities would have to give it, in a consistent manner.

The survey also included some open-ended questions. Responding to these, some financial statement users said having the information in the financial statements where it is audited would “keep management discretion in valuing intangible assets within reasonable limits,” the survey write-up says. It would also more easily allow comparisons between similar companies, and it would generally be easier to compare with other financial statement information.

Source: IASB/IFRS

The survey also highlighted a key issue over the treatment of intangibles on the balance sheet – that IP which is internally generated cannot usually be included, while that which is ‘bought in’ must be included – which many IP valuation experts argue means internally generated IP is effectively invisible, or only appears as a sunk cost, no matter how much revenue it may be driving for a company. This is the main reason, experts suggest, why there is such a disparity between the book value of IP-rich companies and their stock market value.

Source: IASB/IFRS

The IFRS staff paper can be downloaded here: https://www.ifrs.org/content/dam/ifrs/meetings/2025/february/iasb/ap17c-findings-on-user-survey.pdf