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Accounting for Intangibles: Financial reporting and value creation in the knowledge economy

Accounting for Intangibles: Financial reporting and value creation in the knowledge economy

Ricardo Blaug and Rohit Lekhi from Research Republic LLP
16 September 2009

A new report from The Work Foundation highlights the urgent need for UK organisations to adopt a more comprehensive and consistent approach to how they financially record their investments in intangible assets. As industrialised economies are increasingly becoming knowledge-based, competitive advantage and organisational performance are increasingly generated from investment in intangible knowledge-based assets such as R&D, human and organisational performance. The report outlines that, while there is widespread recognition of the value of such assets, we are still unable to account for them mainly because of a lack of appropriate accountancy measures. As a result, investors, shareholders and senior managers are likely to come up with less well-informed decisions.

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