How startups can tackle The Intangible Hulk

GOING “asset-light” is almost something of a religion in StartupLand. Unlike the traditional business models of yore – such as real estate and commodities – tech companies focus heavily on clever code and nifty intellectual property (IP). These are assets that can’t be physically held, hence dubbed “intangible assets”. As South-east Asia gets more digitalised, intangible assets have become more important to its economies. 

But this presents a new problem: you can’t really get a good picture of a company’s intangibles from its financial statements. So while companies are holding onto more of these assets, stakeholders are left in the dark as to their exact scope, value and significance. 

This is where Singapore is trying to make a difference: by coming up with a framework that guides companies on how to make intangible asset disclosures. While this may sound like an abstract exercise, there are very real benefits: it could mean better valuations for startups or even easier access to loans using intangibles as collateral. As I argue, the need for transparency in intangibles is urgent.