IPOS and ACRA launch Intangibles Disclosure Framework to disclose and communicate value of intangible assets

27 September 2023

On 4 September 2023, a new framework to disclose and communicate the value of intangible assets (“IA”) was launched at IP Week @ SG 2023. The Intangibles Disclosure Framework (“IDF”) is a public-private initiative led by the Intellectual Property Office of Singapore (“IPOS”) and the Accounting and Corporate Regulatory Authority (“ACRA”). The IDF is among the first in the world and was developed by an industry working group comprising representatives from the accounting, valuation, legal, and finance sectors.

IA are non-physical assets which include registrable intellectual property (“IP”), such as trade marks, patents, designs, as well as non-registrable IP and IA like copyright, trade secrets, goodwill, know-how, or software codes.

An initiative of the Singapore Intellectual Property Strategy 2030, the IDF will be rolled out on a voluntary basis and seeks to provide stakeholders with consistent information about an enterprise’s intangibles, so that they can make more informed assessments of its business and financial prospects.

The IDF defines an intangible as “a non-monetary resource that manifests itself by its economic properties; it does not have physical substance but grants rights and/or economic benefits to its owner”. The IA defined under the prescribed accounting standards in Singapore are a subset of intangibles defined under
the IDF.

The disclosure principles in the IDF are anchored in four pillars:

  • Strategy: Helps enterprises to communicate how their IA contribute to their overall corporate strategy.
  • Identification: Recommends how enterprises should categorise IA based on their nature and characteristics, facilitating comparability.
  • Measurement: Guides enterprises and stakeholders to make better assessments of the performance of enterprises’ IA through relevant metrics.
  • Management: Helps enterprises identify, assess, and manage risks and opportunities related to their IA.

Collectively, these pillars set out a structure to guide businesses to disclose their IA in a systematic and consistent manner. This helps potential investors and business partners better appreciate the value of IA and IP of businesses, thereby allowing businesses to maximise their economic potential.

New IP Resources

Complementing the IDF are two new resources which aim to help enterprises better grow and commercialise their IA and IP:

  • GoBusiness IP Grow platform connects enterprises with a suite of IA/IP service providers and resources, as well as an e-Adviser tool for live, customised recommendations, wherever they are on their IP journey.
  • IP Ready programme helps enterprises build internal capabilities to manage IP. They will be paired with an IP strategist to develop an IA strategy, institutionalise IP management processes, and build skills for long-term IA/IP and business growth.
  • The Memorandum of Understanding concluded between IPOS and the Singapore Business Federation will also build IP capacity and provide in-market assistance to Singapore-based businesses through access to GlobalConnect@SBF’s internationalisation services, market advisors and global contacts.

Public consultation and summary of responses

The launch of the IDF follows an earlier joint public consultation between December 2022 and February 2023, which we discussed in an article titled “ACRA and IPOS seek feedback on proposed Intangibles Disclosure Framework to increase transparency and commercialisation of intangibles”.

On 4 September 2023, IPOS and ACRA also released the summary of responses to feedback received from the public consultation. Overall, the participants indicated that the IDF was well-structured and easy to understand. The IDF was revised to address feedback on technical and implementation matters.

Reference materials

The following materials are available on the IPOS website www.ipos.gov.sg and Ministry of Finance website www.mof.gov.sg: