27/08/2021 - EFRAG Discussion Paper: Better information on intangibles – which is the best way to go?

​​When EFRAG consulted on its proactive research agenda in 2018, constituents considered a project on intangibles as very important. Constituents noted that internally generated intangibles play an increasingly important role for the performance of an entity and are not reflected adequately in financial statements. They also indicated that the discrepancies between the accounting for acquired and internally generated intangibles need to be examined.

Based on input from the EFRAG Advisory Panel on Intangibles, the Discussion Paper presents different possible approaches to improve information on intangibles together with the related advantages and disadvantages. 

The Discussion Paper focuses on information to be provided in the financial statements, including the notes, and in the management report, and considers information on intangible sources of possible economic benefits other than financial assets. The scope of ‘intangibles’ is thus broader than intangible assets and covers sources of possible economic benefits that would not be controlled by an entity. The Discussion Paper focuses on intangibles used in the entity’s operation. Constituents are consulted on the possible approaches including whether/how they should be combined.

The input from constituents is considered to be useful for the IASB and EFRAG when considering current and future proposals related to intangibles. Comments are welcome by 30 June 2022.

In relation to the publication of the Discussion Paper, Chiara Del Prete, EFRAG TEG Chairwoman said:
‘I am pleased to announce the issuance of this Discussion Paper, which may support and stimulate the ongoing debate on the future reporting for intangibles and value creation, a key area for connecting financial and sustainability reporting.’​