ABSTRACT
The inability of the corporate economy to adequately represent the value that derives from social production is clearly visible in the valuation of corporate assets. One of the most important economic developments in the post-war years had been the rising importance of intangibles. The term intangibles generally refers to things such as brand value, intellectual capital, or reputation (a number of different terms are tossed around) that are reflected in the market valuations of companies, and that have a notable impact on business performance, but that are only partially reflected in established accounting practice. (For example, since 2001, the US Financial Accounting Standards Board enables companies to take up purchased brands and other forms of ‘goodwill’, but investments in brand building and in R&D are treated as expenditure, rather than investment.) Even when these resources are taken up in official accounting they are valued in different ways in different contexts. In contrast to the well-established standards for valuing ‘material’ assets, official accounting rules differ widely in valuing intangibles. As Nir Kossovski, executive secretary of the Intangible Assets Society, an advocacy group that is working to develop new standards and practices for monetizing intangible assets, laconically concludes: ‘there is not the rigor and uniformity that governs the valuation of tangibles’ (Caruso 2007). The same thing goes for the valuation of intangibles outside of official accounting rules. A study of the valuation of intangible assets on the part of credit rating agencies such as Moody’s or Standard & Poor, show that these have little in terms of systematic rules for the valuation of such assets, but generally rely on ‘the analysts experience and intuition’ (Del Bello 2007: 187).
