How could financial reporting evolve to provide better information about intangibles used in the entity’s operations?

Chiara Del Prete

Chapter 6 in Handbook on Intangibles, 2026, pp 120-142 from Edward Elgar Publishing

Abstract: This chapter explores the limitations of existing financial reporting frameworks in capturing the economic relevance of internally generated intangible assets and proposes a pathway for their improved representation. As intangible resources become increasingly central to corporate value creation, the chapter critically assesses how current recognition and measurement rules – especially under IFRS – often result in incomplete or inconsistent portrayals of such assets. Several alternative accounting approaches are discussed, including threshold-based capitalisation and conditional recognition, each evaluated for its decision-usefulness, reliability and comparability. The chapter further examines the potential role of supplementary disclosures to enhance transparency and user understanding in cases where recognition in the primary financial statements is not feasible. By aligning proposed reforms with the broader objective of delivering relevant, faithful and verifiable information to capital market participants, the chapter contributes to the ongoing debate on modernising financial reporting to reflect the evolving nature of value creation in knowledge-driven economies.

Keywords: Financial reporting; Intangibles; Information disclosure; Operational assets; Reporting evolution (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035306367
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