Question 3b ii
External disclosure of information on intangibles is useful only insofar as it is understood and is relevant to investors. It appears that investors are increasingly interested in and understand disclosures relating to intangibles.
A concern is that, due to the disclosure requirements of IFRS Standards, investors may feel that the information disclosed has limited usefulness, thereby making comparisons between companies difficult. Many companies spend a huge amount of capital on intangible investment, which is mainly developed within the company and thus may not be reported. Often, it is not obvious that intangibles can be valued or even separately identified for accounting purposes.
The Integrated Reporting Framework may be one way to solve this problem.
Required:
(ii) Discuss whether integrated reporting can enhance the current reporting requirements for intangible assets. (3 marks)