INTANGIBLE ASSETS ARE NOW A BOARDROOM PRIORITY, REPORT FINDS
The Global Intangible Finance Tracker from brand valuation consultancy, Brand Finance, has revealed Microsoft is set to overtake Apple as the world’s most intangible company post-pandemic.
Intangible assets are identifiable, non-monetary assets without physical substance. These assets can be grouped into three categories: rights such as leases and contracts, relationships such as trained workforces, and intellectual property including brands and copyrights.
As a result of the global pandemic, organisations and economies across the world turned to digital communications tools such as Microsoft Teams to keep business running. With an intangible asset value of $1.9 trillion, Microsoft has become the world’s most intangible company ahead of Apple, Saudi Aramco and Amazon.
Although Apple is the more valuable company by approximately $200 billion, the company now has a lower estimated intangible value than Microsoft, at $1.87 trillion. Microsoft has excelled in terms of its portfolio of brands and business operations in 2020. David Haigh, chairman and CEO of Brand Finance, says, “In times of crisis, brands – especially those most valuable and strongest in their categories and markets – become a safe haven for capital.”
The pandemic has seen intangible assets grow faster than usual as people recognised the importance of people, innovation, reputation. “Like gold or fine art during past economic downturns, nowadays well-managed, innovative, and reputable brands are what the global economy turns to in the hour of need. There can be no better evidence for why brands matter than the role they have already played and will continue to play in the post-COVID recovery,” says Haigh.
Each year the Brand Finance Global Intangible Finance Tracker ranks the world’s largest companies by intangible asset value. Over the past 25 years, intangibles have seen incredible growth of 1145% from an estimated $6 trillion in 1996 to $61 trillion in 2019 and $74 trillion in 2021.
Brand Finance and the International Valuation Standards Council is calling for more comprehensive reporting of intangible asset value to facilitate investor understanding and economic recovery post Covid-19.
Find the full Brand Finance Global Intangible Finance Tracker here.