Businesses are a mix of tangible and intangible resources, contributed by different categories of stakeholders with different expectations of a reward in exchange for their contributions. This raises the question of whether management is considering organic value creation, even if the amount is unrealized and excluded from external financial statements. Many professionals view these questions as overlapping with the demand for sustainable business information (or ESG for environmental social governance).

Intangible assets have grown to become a major source of value to public corporations. While these types of assets fail to meet the criteria for recognition under current reporting standards, the identification, assessment, management, control, retention, and nurturing of these assets are necessary for an organization to maintain its capacity to operate. This IMA® (Institute of Management Accountants) Statement on Management Accounting (SMA) identifies the importance and breadth of unrecognized intangibles and presents issues and concerns related to them.

This SMA was authored by Nick A. Shepherd, FCMC, FCCA, CGA and Mary Adams, CMC. IMA also recognizes the contributions of Rosemary Amato, CMA, CPA, and Gary Cokins who served as reviewers of this report.

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