Who is Owner: Accounting

The IFRS (International Financial Reporting Standards) defines intangible assets as nonfinancial assets without physical substance but which can be identified. Sometimes, these assets are listed on a balance sheet if the future economic benefits will contribute to the company and the cost of the asset can be measured reliably. That is to say, the intangible assets listed on the balance sheet belong to the company and the company could be the legal and/or economic owner of the intellectual property. Examples of identifiable intangible assets sometimes listed on a balance sheet include patents, trademarks, copyrights, franchises and other rights. Under IAS 38, companies are prohibited from including the capitalization of internal research costs as intangibles.

Goodwill is the excess of the cost of acquisition over the acquirer’s interest in the fair value of the identifiable assets and liabilities acquired in acquisition. The company who has to report the goodwill is considered the owner of the portfolio of non-identifiable intangible assets, e.g. embedded workforce and supply chain platform intelligence.