Accounting terminology describes ‘goodwill’ as that part of business value over and above the value of identifiable business assets.
Business goodwill is a key intangible asset that represents the portion of the business value that cannot be attributed to other business assets.
(Btw: For a quick definition on institutional, professional, practice and practitioner goodwill, see for example here or Wikipedia.)
IA’s are according to this:
- Intangible assets can be identified and described. They must be a specific property, not an idea.
- Intangible assets are legal property. Just as tangible assets, the owners can assert their legal rights to and defend their possession of intangible assets.
- Ownership of intangible assets can be transferred. For example, the owners can sell them or give them away.
- Evidence of intangible existence. Documentation is a typical way to establish that. Examples are customer lists, blueprints, contract documents, software source code printouts.
- Intangible assets have a life span.
Why is it locked out of the definition of an intangible asset when all you have to do is follow through with this logic and place ‘idea’ in the above bullet points? So tell me, what did my last idea not do to increase business value?
I carried it around, I gave it to somebody, I wrote it down, it got me a good reputation, I was paid for it and in the end it might be a good one to keep for solving a specific problem in the organisation later on. A bit of goodwill, anyone?
Consensio has specialised in start-up brands for the local Australian market since 2001. It is evident that successful start-up brands undergo a process of intangible asset development, ideally underwritten by everyone in the organisation.
Parts of the organisation traditionally dealing in ‘tangibles’ are the finance and sales departments. HR and Marketing are the domain of the intangible asset.
The process of developing a linear intangible asset chain can be described in this model. They are presented here as linear, because in my experience, setting them in random order is not creating sustainable competitive advantage in the long-term. Step 3 to 7 are intrinsically linked and are more like layers than consecutive steps as they are initiated simultaneously. (more…)
I am reading ‘The Passion of the Western Mind’ by Tarnas and try to piece together the obvious argument, that our Western definition of intangible assets is a Platonist understanding of the subject.
We strive to match Plato’s world view when we describe the intangible as follows: we interpret the world in terms of archetypes (good-bad, beauty-ugly, single-multi, intangible-tangible, asset-non-asset…).We strive to define it by using changeless absolutes and look for the essence of universal truth and structure about ‘intangible assets’.
We ask what is the precise relation between the pattern of ‘intangible asset’ and the empirical world of everyday reality. Why is this important to the way we do business 2000 years later? (more…)
I am trying to clarify the terminology of Intangible Assets (IA). It turns out, that intangibles mean something else to everybody, depending on who you ask.
According to NSW’s Treasury Department’s policy definition
“There is currently no Australian Accounting Standard that comprehensively deals with intangible assets. However there are general requirements contained in a number of standards that are applied to intangible assets.“
And then the policy goes on to explain:
“The main impact of this standard on ACT Government agencies is in relation to software, as this is the only material intangible asset that is held by the ACT.“
(more…)
the focus on my studies for the next years will generally be on intangible assets and what they mean to Australia’s economy.
Since 2001, where Daley found that Australia is not utilising intangible assets (IA) to its full advantage, and therefore falling behind in R&D, something interesting has happened.
The economy boomed on the back of the mining and resource demand despite study findings that the IA driven economy is the sustainable future direction for developed nations.
The advocates of social capital and the creative class seem pretty silent after the dot com crash and amongst the gold rush mentality of the current mining boom in Western Australia.
Perth, Western Australia is a prime example of a state in an identity struggle for the quest to please existing and new citizens.
Although there is a movement to revitalise the city and a call to continue with the IA paradigm to ‘build a state of creativity’ , we are a far cry from amalgamating the operational with the mundane concept of ‘culture and the arts’ in this city. (more…)
