Intangibles: from definition to evaluation, recognition and disclosure

The analysis of intangibles represents one of the most interesting issue at the moment, in particular, if considered at the light of two important aspects. Firstly, as it is shown by empirical analysis too, the firm’s book value is often quite different from its market value pointing out that the financial statements alone, in many cases, can not represent certain “intangibles” resources existing within the company. Since the aim of the financial statements is not to determine the value of the firm rather the performance and the connected financial position, this statement should not be acknowledged with a negative connotation. This situation points out the need to highlight the value of such intangible resources and communicate it to investors and other stakeholders interested in them, also using different systems of reporting. On the other hand we should take into account the recent first application, within the European Union, of the IAS/IFRS which define an accounting method for intangible assets very different from the one applied in the previous versions of the IV and VII Council Directives later on introduced in the Italian law. In particular, in this paper I will examine various definitions of the intangible assets, some of which taken from the international accounting Standards Setters, with particular reference to the effects that such definitions have on the methods of evaluation and recognition of the intangibles. In this context, particularly important is to make a further distinction between those intangibles that constitute specific assets of the balance sheet from those intangibles factors which must be included in the most generic category known as goodwill. In conclusion, I will also make a first analysis of the most important implication generated by the adoption of Ias/Ifrs in the recognition of intangibles.