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1. The Accounting and Corporate Regulatory Authority (ACRA) and the Intellectual Property Office of Singapore (IPOS) are looking for feedback on a proposed Intangibles Disclosure Framework (Framework) that would help businesses disclose and communicate information about their intangible assets. The public consultation will be open from 14 December 2022 to 28 February 2023.

2. The Framework for Intangible Asset Disclosure is a public-private initiative supported by the Ministry of Finance. It was developed by the Intangibles Disclosure Industry Working Group, which comprises representatives from the accounting, valuation, legal, and finance sectors.

The Framework aims to improve market transparency by enabling businesses to identify and disclose their intangibles. Innovation has become a global engine of growth, and the value of global intangibles is expected to reach an all-time high of more than US$74 trillion in 2021.

A company’s intangible assets are its non-physical assets that have value but cannot be seen or touched. These include technologies, brand recognition, data, trade secrets, and intellectual property (IP) such as patents, copyrights and trademarks. Intangible assets are important because they can give a company a competitive advantage over its rivals.

3. The Framework provides stakeholders with standardized information about a company’s intangibles, giving them a more informed perspective of the business and its financial prospects. The aim is to help businesses communicate the value of their intangibles and maximize their economic potential, enhance information transparency and facilitate the commercialization of intangibles. This will have a positive knock-on effect, such as increasing access to financing, as businesses, investors and financial institutions gain a clearer understanding of a company’s intangibles.

4. The Framework consists of four pillars:

• Strategy: How a company’s use of intangibles, such as its brand, contributes to its overall corporate strategy.
• Identification: How intangibles are categorised based on their nature and characteristics. There are six recommended categories under this pillar:  marketing, customer, artistic, contract, technology, and human capital.
• Measurement: How a company measures its intangibles – the performance metrics and targets used.
• Management: How a company identifies, assesses and manages intangibles-related risks and opportunities.

5. The Intangibles Disclosure Framework will present a holistic picture of how intangibles are linked to business strategy and revenue, providing value-relevant metrics to help communicate the value and quality of intangibles, said Mr. Andre Toh, Co-Chairman of the Intangibles Disclosure Industry Working Group.

6. “As businesses invest more in intangible assets, there’s a need for an Intangibles Disclosure Framework to help improve transparency and decision-making,” said Mr. Frederick Chin, Co-Chairman of the Working Group. “For banks, the Framework provides a better understanding of how intangibles contribute to the cash flow of businesses.”

7. The Framework is a key initiative under the Singapore IP Strategy 2030, a 10-year blueprint to attract and grow innovative enterprises using IA, including IP. The Framework’s goal is to encourage economic growth for companies to move towards a vibrant and creative Singapore economy driven by IA.

8. The consultation documents for the ACRA and IPOS websites are available to the public and on the REACH consultation portal. Members of the public can submit their comments via FormSG. 

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