The End of Accounting and the Beginning of Intangibles Accounting

I’ve been discussing The End of Accounting with a lot of people but hadn’t gotten around to reviewing it here. I definitely recommend it as a fresh take on the intangibles problem and a sobering view of the challenges facing accountants today.

Baruch Lev has been talking about intangibles about as long as anyone. I often quote this quick video that we recorded of Dr. Lev at an intangibles conference we organized in DC in 2011 where he say that intangibles are “the only assets that create value.” His logic is that tangible assets are commodities available to everyone. The only alternative is the development of intangible assets. Continue reading “The End of Accounting and the Beginning of Intangibles Accounting”

Corporate Value Drivers –  Closing the Intangible Information Gap

Ocean Tomom Intangibles in S&P 500

The intangibles information gap isn’t going away. In fact, it keeps growing. It’s the undercurrent of a lot of conversations about corporate value drivers, integrated reporting and even ESG.  So I figured it was time to review the latest data. Continue reading “Corporate Value Drivers –  Closing the Intangible Information Gap”

Three Paths to Integrated Reporting in the U.S.

Integrated reporting is still emerging in the U.S. It’s a mostly bottom-up phenomenon with individual companies forging their own path. I explored these journeys in a report I released a few weeks ago. Now that I’ve had time to digest the findings, I am seeing three basic approaches.  The first is the integrated summary report. This is the path taken by Coca-Cola, GE and JLL.  Average length of these three reports was 44 pages. In this approach, the company leaves its current financial and sustainability reporting as is and adds a new report on top of it. Dunstan Allison-Hope calls this the “triangular approach” with an integrated report sitting on top of the two traditional reports. You could say that this kind of report is a synthesis of the traditional reports that connects the dots between them but don’t include all the detail. Continue reading “Three Paths to Integrated Reporting in the U.S.”

Samsung and Apple – Contrasting Value Creation Models

Apple and Samsung are the leading global smartphone brands. They sell products that essentially do the same things. But ask just about any consumer and they’ll tell you that the companies are radically different. This post explores these two companies using an integrated capital model to explore how and why these differences exist. Continue reading “Samsung and Apple – Contrasting Value Creation Models”

Samsung’s Value Creation Model

As promised, here is a summary model of how Samsung creates value. It’s meant to be a companion piece to the post I wrote last week on Apple. Next week I’ll compare the two.

Of course, between the time I said I was going to research this post and now, Samsung’s Note 7 crisis escalated and the company ended up halting production of the product. 

Here’s a summary by Hiawatha Bray and the NYT of how things look right now on that front. Although it’s not the purpose of this post, this analysis might shed light on Samsung’s strength and capacity to survive this crisis.  Continue reading “Samsung’s Value Creation Model”