Michael D. Moberly, Principal, Founder kpstrat and ‘Business Intangible Asset Blog
An essential prelude to conducting internal ‘audits – assessments’ of any business’s intangible assets, is recognizing – differentiating those which are ‘mission essential’ relative to their contributory roles and value-adds to (business, product, service, etc.) attractivity, competitiveness, sustainability, valuation, and revenue generation capability-capacity.
Every business which I am familiar, irrespective of sector, stage, revenues, reputation, brand, etc., there are arrays of business things intangible which are at work – in play, i.e., functioning and contributing, generally favorably and beneficially, but sometimes, adversely, (one rationale for conducting audits – assessments.)
Audits – assessments of a business’s intangible assets, (today, going forward) are (fiduciarily) obliged to…
- inspect, unravel, differentiate, inventory, and appraise the materiality, contributory roles, value-adds, and risks to proprietarily developed-held intangible assets, e.g.,
- how – ways collections of business things intangible interact, collaborate, and translate to valuation, competitiveness, and preferably, revenue generation.
Experientially, the intangible asset side of businesses is often and variously (a.) undifferentiated, under-valued, overlooked, taken-for-granted, or (b.) relinquished to external service providers…
- where business things intangible are likely to be unoriginally characterized in narrow and conventional (statutory) contexts as to their relevance, taxability, value-ability, and longevity, ala amortization, depreciation, residual value, and recorded cost, etc.
While the above offers predictability and structure to business operations, the following business economic – operation reality is left understated or marginalized, i.e.,
- 70+% of most business’s valuation, revenue generation capability-capacity, competitiveness, attractivity, and sustainability (across sectors) lie in – emerge directly from the intangible (non-physical) assets, because
- more business leaders – management teams are developing the right intangible assets in the right way, introducing, and applying same at the right time, in the right place, and at the right cost to…
- advance – benefit a particular-product, service, reputation, and/or brand, etc.
It’s important to recognize, across all sectors, businesses are increasingly and irreversibly intangible asset intensive, dependent, and reliant.
Prudent business leaders, management teams, boards, and investors, are obliged to avoid wholly conceiving business things intangible via conventional definitions, standards of applicability, liability, valuation, ‘life-value cycle, and reporting.
Readers of ‘Business Intangible Asset Blog’ are encouraged to review other posts wherein arrays of issues related to business things intangible are experientially researched and authentically and practically expressed.