At its most obvious, when unmeasured, intangible assets amount to unmanaged risk.

The debate on the perceived need to measure the value of organisational intangible assets has been around for over 30 years. But the complexity of the issue has consistently obscured the benefit of numerous attempts to bring accounting and valuation practices up to date with the realities of the post-industrial economy. In the balance-sheet approach to the world, intangible assets – be they human resources, processes, brands, intellectual capital, customer goodwill or the value of IT-underpinned productivity, are somehow considered to be divorced from the cash-flow. They are therefore deemed irrelevant in determining a company’s current or future value. 

In the parlance of the finance community, which rewards profitability (or an appearance of it) over any other aspect of company performance, the intangibles conundrum is no conundrum at all.