1 The Accounting and Corporate Regulatory Authority (ACRA) and the Intellectual Property Office of Singapore (IPOS) have launched a public consultation for an Intangibles Disclosure Framework (Framework) to help businesses disclose and communicate their intangibles. The public consultation exercise will run from 14 December 2022 to 28 February 2023.
2 A public-private initiative supported by the Ministry of Finance, the Framework was developed by the Intangibles Disclosure Industry Working Group which comprises representatives from the accounting, valuation, legal and finance sectors. (See Annex for composition of Working Group.) The Framework seeks to improve market transparency by enabling businesses to identify and disclose their intangibles. Innovation has become a global engine of growth with the value of global intangibles reaching an all-time high of more than US$74 trillion in 2021. Intangibles are the non-physical assets of a company that include technologies, brand recognition, data, trade secrets, and intellectual property (IP) such as patents, copyrights and trade marks.
3 The Framework aims to provide stakeholders with standardised information about a company’s intangibles, so that more informed assessments of business and financial prospects can be made. The Framework will help businesses communicate the value of their intangibles and maximise their economic potential. This will enhance information transparency and facilitate the commercialisation of intangibles, such as increasing access to financing as businesses, investors and financial institutions gain clearer insights on a company’s intangibles.
4 The Framework consists of four pillars:
- Strategy: How a company’s use of intangibles contributes to the organisation’s overall corporate strategy.
- Identification: How intangibles are categorised based on their nature and characteristics. There are six recommended categories under this pillar, namely marketing, customer, artistic, contract, technology and human capital-related.
- 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 Mr Andre Toh, Co-Chairman of the Intangibles Disclosure Industry Working Group, said: “The Intangibles Disclosure Framework will provide value-relevant metrics to help communicate the value and quality of intangibles, and will present a holistic picture of how intangibles are linked to business strategy and revenue.”
6 Mr Frederick Chin, the Working Group’s other Co-Chairman, added: “As businesses increase their investments in intangible assets (IA), there is a need for an Intangibles Disclosure Framework to help improve transparency and decision-making by private and capital market players. For banks, the Framework provides a robust understanding of how intangibles contribute to the cash flows 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. It aims to encourage growth for companies so as to move towards a vibrant and innovative Singapore economy driven by IA.
8 The public can access the consultation documents on the ACRA and IPOS websites, and the REACH consultation portal. Members of the public can submit their comments via FormSG.
Annex
Composition of the Intangibles Disclosure Industry Working Group
- Frederick Chin
Managing Director, Head, Group Wholesale Banking & Markets, United Overseas Bank (Co-Chairman) - Andre Toh
Partner, Valuations, Modelling & Economics Leader, EY Singapore (Co-Chairman) - Chai Ming Jie
Senior Intellectual Property Counsel, Lenovo - Tricia Feng
Chief Counsel, Asia Wealth and Asset Management
Manulife Investment Management - Srividya Gopal
Managing Director and Southeast Asia Leader, Kroll - Lam Chee Kin
Managing Director, Head, Legal, Compliance & Secretariat, DBS - Jamesy Laya
Partner, KPMG - Karen Loon
Member of the Governing Council, Singapore Institute of Directors - Jack Ow
Assistant General Counsel, APAC Intellectual Property, Operations & Technology
Citibank - Murli Ravi
Co-founder and Managing Partner, Tin Men Capital - Tan Boon Gin
CEO, SGX RegCo - Tan Ching Ne
Partner, PwC - Mark Teng
Executive Director, That.Legal - James Xu
Partner, Deloitte
