What is Intangibles in Accounting?

Accountants vs. ICountants  January 29, 2013 – 10:34 am

accounting for intangibles Instead of counting and allocating money the Social Era will be about counting and allocating value. This will mean a shift from Accounting to ICounting.

An accountant is a practitioner of accountancy or accounting, which is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and others make decisions about allocating resources.  Accountants measure and categorize the outputs, financial results, of a business.

The American Institute of Certified Public Accountants (AICPA) defines accountancy as “…the art of recording, classifying, and summarizing in a significant manner and in terms of money…” transactions and events that are at least partly financial in character, and interpreting the results.  I’ve often told my accounting friends “You count everything that is consumed but you don’t account for what produces the value that is consumed“.  Most agree.

Counting Value That Produces Results

We live in an Era where producing value is more important than producing things. Value consumption is the engine that produces results which need to be accounted for, the role of accountants. However there appears to be a void in accounting for what produces value. Value is the source that produces results in the Social Era. The source of value creation for any business, institution and even individually rest within this fuzzy thing called “intangibles”. Intangibles represent four distinct kinds of capital that while recognized for centuries has never been defined, measured or accounted for.  The four distinct areas of intangible capital are:

Source: Relationship Economy

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