FRC publishes feedback statement to its Discussion Paper on business reporting of intangibles

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01 Feb, 2021

The Financial Reporting Council (FRC) has published a feedback statement to its Discussion Paper on business reporting of intangibles.

In February 2019, the FRC issued a Discussion Paper on the Business Reporting of Intangibles which considered the case for radical change to the accounting for intangible assets and the likelihood of such change being made in the near future.  The feedback statement provides a summary of the views expressed in the responses to the Discussion Paper. 

The majority of respondents acknowledged the limitations of the current reporting framework in capturing and presenting clearly the nature and value of intangibles and were supportive of efforts to address this issue, including strong support from investor respondents.

The main reservation expressed about the proposals in the Discussion Paper was that, given the inherent measurement uncertainty relating to intangible assets, and the difficulty in identifying future-oriented expenditure, efforts to provide greater transparency would lead to highly subjective disclosures and involve a high degree of management judgement. There were also concerns around the commercial sensitivity of the information and compliance costs.

The feedback statement is available on the FRC website.

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