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EFRAG research project on better information on intangibles



The aims of the project are: 
  • to explain how entities report on creating, maintaining and/or improving their value; 
  • to explain how users consume information on creating, maintaining and/or improving value, and the extent to which current reporting addresses their needs; and 
  • to provide suggestions on how information on creating, maintaining and/or improving value can be provided in financial reports in a manner that is useful for decisions on providing resources to the entity. 
However, the project does not aim to change accounting requirements with the view to align the reported equity carrying amount with the market value of the company.  

To develop alternatives to provide more relevant information on intangibles in financial reporting, the EFRAG Secretariat plans:
  • to address a number of aspects in relation to internally generated intangibles, including a categorisation and description of the different types of assets (marketing, technological, social, reputational or human capital) and how their different features are relevant in terms of financial reporting.
  • to investigate how to consider uncertainties that exist both in relation to the entity's ability to access future benefits and their amount and timing. This includes, for example, considering the ability of competitors to duplicate the entity's resource,  barriers for usage and spillovers.
  • to develop metrics to express earning potential and value: Measurement or disclosures.

Project history

In August 2018, following the input received from constituents in response to the EFRAG Research Agenda Consultation, the EFRAG Board decided to add a research project on better information on intangibles to its research agenda. 

In Q1 of 2019, the EFRAG Secretariat conducted a total of 17 interviews with academics, preparers, users, valuers and other professionals. There was a degree of consensus that that information about the intangibles is lacking in the primary financial statements, however, interviewees expressed a mix of views regarding the possible solutions to the problem.

On 5 February 2020 EFRAG published a literature review on the reporting of intangibles. the review was performed by a team from the University of Ferrara following a tender. As much literature is available on intangibles, the review only included a protion of all available papers. The authors of the review accordingly prepared a list of additional available papers (following the search criteria applied). This lise is availabe upon request (requests should be submitted to:

The EFRAG Secretariat has created a panel of users and preparers to identify examples of good practice offering selected users and preparers a forum for exchanging ideas on how to improve information on intangibles. The panel has started in March 2020.

Next Steps and Deliverables

The EFRAG Secretariat plans to issue the following deliverables in further stages of the research project:

    1. Problem Description. Performing activities which will result in gathering information in order to formally define and describe the problem. This phase is expected to be finalised in H2 2020.
    2. Input for the EFRAG comment letter on the IASB's project regarding management commentary. This input should be ready for the expected Exposure Draft in December 2020.
    3. Key Information solution. Researching possible solutions to the defined problems. This phase is expected to be finalised in H1 2021.
    4. Testing: testing the identified solutions on different entities including, if possible, testing with the European Corporate Reporting Lab. This phase is expected to be finalised in H2 2021.
EFRAG’s research project on better information on intangibles also provides the opportunity to gather input and insights that could feed into other projects including: 
  • The in-progress consultation on IASB’s Discussion Paper Business Combinations Disclosures, Goodwill and Impairment; 
  • The IASB 2020 Agenda Consultation, in particular regarding the need for an IASB project on intangibles and its possible areas of focus.
  • The developments at EU level on the reporting of non-financial information.
In the course of the research project, the EFRAG Secretariat plans to collaborate with the standard setters and organisations that have already published reports on intangibles.

Lastly, further interactions with users and preparers are expected to occur throughout the life of the project, including defining the issues, identifying possible solutions and testing them. Interactions with users and preparers are in particular expected to materialise during the following realised or planned activities:  
  • Setting up an Intangible Advisory Panel (see above).
  • Organising roundtables on intangibles.
  • Regular consultations with the EFRAG User Panel.
  • Public consultations on EFRAG’s future Discussion Papers.
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