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Johanna Sandman mail@johanna-sandman.com https://www.johanna-sandman.com

About Intellectual Assets and Their Treatment in Financial Statements and

National Accounts

Intellectual assets are the basis of wealth and growth. Gross domestic product is dependent on our ability to provide value added. The greater our ability to provide value added per working hour, the greater will our productivity be. Issues that foster our ability ensure productivity include human capital (e.g. skills and education - pls. also note the generally used term “ human capital ” ), structural assets ( coded information, information systems etc.) , and relational assets (the ability to benefit from relations) . At the moment, not all intellectual assets are recognized in balance sheets . Intangible assets that can be recognized in balance sheets , include e.g. development costs , goodwill , advance payments, and intangible rights . Goodwill is often used in recognition of brand value ( as cleaned), and refers usually either to difference between company equity and assets at the d ate of recognition (e.g. balance sheet date) or at company acquisition. In other words, goodwill as such can contain reflections of many other issues, such as matters influencing stock prices in general (e.g. depression or boom, fluctuations etc.) . A t opic of conversation could be e.g. the exact definition of brand value i.e. the influence of personnel and management skills, company image, perspective s (the perspective buyer s and stock owners does not necessarily reflect all information related to e.g. business secrets) , visibility of different intellectual property rights , and the constancy of brand value. A ctivities such as marketing and education are treated as costs. However, for example marketing activities are a significant factor of competitiveness . T he activities of strategic marketing can bear fruits for a long time and influence the market share / sales and prices of sold articles for a lo nger period of time . In addition to product and process innovations, i nnovations can be related to e.g. business models or marketing. Creat ion of innovations as well as skills to manage company operations efficiently requires skills. The difference in balance sheet contents e.g. in traditional investment intensive sectors and knowledge intensive business sectors is remarkable, which also influences access to different types of financing. In my opinion , possibilities to recognize certain costs such as marketing or management in company balance sheets would enhance the pr edictability and com pany valuation. It might also impact the ab ilities to gain finance , mitigate risks, and accelerate GDP growth. National accounts include only fraction of intellectual assets that are in possession o f individuals, which may influence the willingness to finance certain activities. Example s of the last mentioned might be the learning and education , wh ereas e.g. the possession of real estate is visi ble in national real assets . It is, however, our knowledge and abilities that ensure the success . On the other hand, we must remember human right perspectives when talking about cer tain intellectual assets th at are in possession of individuals. Our knowledge and skills enable the development of new innovative solutions, enable us to pursue ever better standards of living, and make some matters in life cheaper and acce ssible to larger groups of p eo ple . From this perspective, inaccurate valuations can slow down pos itive development, cause sudde n collapses in the economy, and distort supply/ demand conditions. Johanna Sandman 1.4.20 23
P äivitä selain
INTELLECTUAL ASSETS; Human Capital, Structural Assets, Relational assets
INTELLECTUAL PROPERTY RIGHTS; e.g. Copyright, Patents, Utility Models, Industrial Designs, Trademarks, Trade Secrets, Apellations of Origin
INTANGIBLE ASSETS; Development Costs, Goodwill, Advance Payments, and Intangible Rights (selected)
© Johanna Sandman 2013-2023
Projects
Contact
Blog
Instruments
First Page

About Intellectual Assets and

Their Treatment in Financial

Statements and National

Accounts

Intellectual assets are the basis of wealth and growth. Gross domestic product is dependent on our ability to provide value added. The greater our ability to provide value added per working hour, the greater will our productivity be. Issues that foster our ability ensure productivity include human capital (e.g. skills and education - pls. also note the generally used term “ human capital ” ), structural assets ( coded information, information systems etc.) , and relational assets (the ability to benefit from relations) . At the moment, not all intellectual assets are recognized in balance sheets . Intangible assets that can be recognized in balance sheets , include e.g. development costs , goodwill , advance payments, and intangible rights . Goodwill is often used in recognition of brand value ( as cleaned), and refers usually either to difference between company equity and assets at the d ate of recognition (e.g. balance sheet date) or at company acquisition. In other words, goodwill as such can contain reflections of many other issues, such as matters influencing stock prices in general (e.g. depression or boom, fluctuations etc.) . A t opic of conversation could be e.g. the exact definition of brand value i.e. the influence of personnel and management skills, company image, perspective s (the perspective buyer s and stock owners does not necessarily reflect all information related to e.g. business secrets) , visibility of different intellectual property rights , and the constancy of brand value. A ctivities such as marketing and education are treated as costs. However, for example marketing activities are a significant factor of competitiveness . T he activities of strategic marketing can bear fruits for a long time and influence the market share / sales and prices of sold articles for a lo nger period of time . In addition to product and process innovations, i nnovations can be related to e.g. business models or marketing. Creat ion of innovations as well as skills to manage company operations efficiently requires skills. The difference in balance sheet contents e.g. in traditional investment intensive sectors and knowledge intensive business sectors is remarkable, which also influences access to different types of financing. In my opinion , possibilities to recognize certain costs such as marketing or management in company balance sheets would enhance the pr edictability and com pany valuation. It might also impact the ab ilities to gain finance , mitigate risks, and accelerate GDP growth. National accounts include only fraction of intellectual assets that are in possession o f individuals, which may influence the willingness to finance certain activities. Example s of the last mentioned might be the learning and education , wh ereas e.g. the possession of real estate is visi ble in national real assets . It is, however, our knowledge and abilities that ensure the success . On the other hand, we must remember human right perspectives when talking about cer tain intellectual assets th at are in possession of individuals. Our knowledge and skills enable the development of new innovative solutions, enable us to pursue ever better standards of living, and make some matters in life cheaper and acce ssible to larger groups of p eo ple . From this perspective, inaccurate valuations can slow down pos itive development, cause sudde n collapses in the economy, and distort supply/ demand conditions. Johanna Sandman 1.4.20 23
Johanna Sandman mail@johanna-sandman.com https://www.johanna-sandman.com
© Johanna Sandman 2013-2022
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