Let’s Put Intellectual Property on the U.S. GAAP Balance Sheet

To quote the famous business management guru Peter Drucker, “You can’t manage what you can’t measure.” In the world of financial reporting, recognition and measurement are two of the fundamental matters that must always be addressed, and these concerns, in the context of research and development expenditures, may give rise to intangible assets, the measurement of which admittedly can sometimes be challenging.

Intangible assets known as intellectual property (IP) very often result from R&D. Many of the same accounting and commercialization/monetization attributes of IP also apply to R&D. None are tangible assets.

The Financial Accounting Standards Board (FASB) has been ...