Disclosure of Intangibles : A Strategy for Enhancing Corporate Valuation

The corporate business world has changed notably over the past decade unfortunately many management strategies and approaches have not changed with this transformation as traditional management systems were designed for an era when tangible assets were dominant. Current accounting systems appear to ignore most intangible and knowledge-based assets. Measuring and managing intangible assets - as key determinants of competitive advantage is the new critical management skill. In today's knowledge-based economy, many industries operate without a traditional capital base, and without traditional observable assets. Yet these companies are increasingly the main contributors of value to the economy. It is nothing less than the ability to increase the value of a company by converting intangible assets into financial returns for the organization.As intangibles are critical for the future success of businesses and sustainable performance, there is need to disclose this to stakeholders in order for them to be able to better understand and value the organization. For such organizations capital costs and the volatility of their share prices should decline as investors gain greater certainty about the values of the companies