Intangible assets add value, says DTI
A report released by the Department of Trade & Industry has said companies must find ways of deriving best value from their intangible assets if they wish to be successful.
Fifty UK companies surveyed in the report entitled Creating value from intangible assets were asked to identify things not included on the balance sheet, that they felt added value to their businesses.
They identified relationships, knowledge, leadership and communication, culture and values, reputation and trust, skills and competencies, processes and systems as the key intangible ingredients for corporate success.
As a result of the importance of intangible assets, businesses need to consider in what areas of the organisation they can best use these assets, how they can build on them and which areas they need to develop certain intangibles.
Furthermore, intangible assets such as knowledge, reputation and skills can add value in an making assessments about future options and in an ‘uncertain world’.
The report criticised traditional financial reporting systems which only focused on historic balance sheets, profits and cash flow.
‘You don’t get the right perception of the prospective value by looking at history,’ the report said.
Links
DTI report on intangible assets