Rethinking accounting: Traditional accounting, designed for an industrial economy of tangible assets, is under increasing pressure to modernize and reflect the value of the New Economy's intangible assets.

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Rethinking accounting: Traditional accounting, designed for an industrial economy of tangible assets, is under increasing pressure to modernize and reflect the value of the New Economy's intangible assets.

Financial Executive invited two prominent gurus on the subject of measuring and managing intangible assets to write about those areas, and what they believe should -- and will -- happen.

Baruch Lev, the Philip Bardes Professor of Accounting and Finance at New York University's Stem School of Business, has been called "the father of intangible valuation," and even "the investor's Ralph Nader." He wants us to rethink accounting and apply new principles that communicate an organization's value in a world of intangibles.

Robert A. Howell, a Visiting Professor of Business Administration at the Tuck School of Business at Dartmouth, says financial reporting is broken, and he makes a strong argument for financial statement overhaul.

INTANGIBLES ATA CROSSROADS: What's Next?

Baruch Lev

Baruch Lev says what he refers to as Phase I of the Intangibles Movement" -- creating awareness of the vast magnitude and impact of intangibles, and of the serious information deficiencies and the resulting social harms related to these assets - is currently at a crossroads, and raises the question of "what's next?" He addresses the question here, offering what he deems "a new perspective on the attributes of intangible assets, followed by a proposed shift of focus for the future work on intangibles that is relevant to researchers, executives, investors and policymakers." This is the first of a two-part series.

The pioneers of the intangibles movement strove in the 1990s to alert managers, investors and policymakers to the dramatic shift in the production functi...

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