Let me take the opportunity to let you know briefly on my theory of Intangible and the use of it in Company, Micro-macro level analysis and measurement of IC and related areas of interest to you.
1. Intangible Asset:
In the context of Intangible Asset, IAS 38 Accounting Standards defines it as: "An identifiable non-monetary asset without physical substance." This possibly might have been the root cause of the financial meltdown of 2008, for it has a long history beginning with the Exposure Draft E 50 in 1995 that ended up as IAS 38 Intangible Assets in 1998, to replace IAS 9 R&D - Capitalization of Development Costs of 1977. There was a considerable pressure from the industry to include various non-monetary assets inside the Balance Sheet in early 80's when companies, such as Grand Metropolitan and Rank Hovis McDougall, decided in 1988 to include the value of brand names, either purchased or internally developed, in their consolidated Balance Sheets. Ultimately IAS 38 was released, as is the norm of every such standards by defining each and every word like asset etc. but without defining the word 'Intangible', part of the Title to boot. Intangible Asset remains an oxymoron, intangible - meaning everlasting and asset - meaning a definite life.
2. Defining Intangible - by understanding Substance: The Quality of a substance cannot be separated from it, nor the work associated with it."
It becomes imperative to place where this intangible exists, or for that matter non-exists, in relation to matter.
Every substance has got two characteristics. Quality and the work associated with it. Together it is a single indivisible unit, be it a plant, human being, a stone or a diamond. It has two processes - Creative Process and Action Process. Every substance has an identical creative process be it an IP or a child. Every substance once created has the most unique Action process that is identifiable by its DNA. One substance joins hands with another during the action process for a task accomplishment, yet retaining its independence of each other always, and in turn creates infinite succession of finite purposes being accomplished.
The process of creating a substance is identical - be it a child or a document - Constitution or Standards or an IP, sentient as well insentient objects. It may be 9 months for a child, five years for standards, ten years for a patent or thousands of years for a diamond to be called as a substance. The stages of development are same - from a state of quiescence to conceptual to communication to formation to formulation to emerge as a substance.
The one that takes or creates itself to the next step is same in every substance. A matter is the one that takes up space and has mass. When antimatter collides with matter the mass is converted into pure energy. Collision is an important aspect of turning the mass into energy. In case of natural substance that energy flows continuously whereas in case of others mass remains at the mercy of human intelligence to collide. That antimatter responsible for creating energy is intangible which remains same for every substance.
3. This uniformity provides the basis of measurement and at the same time becomes a comparative tool. I have published a book on this called Inactivity Based Cost Management, where inactivity is directly related to the absence of energy during the creative process as well the action process, that makes the process inactive. Identifying the inactive area provides the basis for study of cost consequence.
4. Mary Adams pointed out one interesting project called "Quick fix for I-93 bridges begins" http://bo.st/mSa20D. This is a project where substance is available and the action process is on, with intangible the element behind execution at its best. "The I-93 bridge replacement is drawing national attention for its ambitious timetable and use of precast elements, including hundreds of 60- and 80-foot-long blocks of concrete and steel fabricated in New Jersey and hauled in by flatbed truck, each section weighing 80,000 to 100,000 pounds." This could be a good case-study on intangible.
5. The essence of Governance is at observance of energy flow. Illustratively, a passenger in an aircraft is provided with the video display of the real-time information on the flight path, a map covering the route, the position on dot, altitude, cruising speed, distance to destination, time from origination point and time to reach the destination. The passenger is given the assurance on the Governance aspects of the flight thereby giving a level of confidence while flying. When the captain announces the likely turbulence the passenger willingly clicks the safety belt without any murmur. - Our Governance reporting system is as archaic as reporting of Hercules marathon race to the people of Greece.
6. Substance becomes the basis of recognition of the happenings of any event. Without it, disaster is bound to occur. For example: the conversation between, Alan Greenspan and Robert Gnaizda [Former Director Greenlining Institute] , from Inside Job: : "We gave him an example of Countrywide, and 150 different complex adjustable-rate mortgages. And he said: If you had a doctorate in math, you wouldn't be able to understand them enough to know which was good for you and which wasn't. So we thought he was gonna take action. But, as the conversation continued, it was clear he was stuck with his ideology. We met again with Greenspan in '05. Often we met with him twice a year, and never less than once a year. And he wouldn't change his mind." Derivatives and CDOs were acted upon before creating a substance. The end result we all know.
7. Currently I am working on connecting the dots .Gov, .Com, .Org, .Agri, .Edu, .Relg to .Ppl with a common yardstick - Intangible. There are three criteria set for an effective Governance, i. Real-time monitoring, ii. Cost Consequence and iii. People Participation, which is made feasible by a uniform measurement that makes intangible indeed unique.
8. I have objection to GRI - Global Reporting System that has done the opposite of what they intended to do by diversified reporting. This is the major problem one comes across because of the limitation set by a Balance Sheet that indeed restricts viewing of operational efficiency by a single dimension - finance. Intangible breaks that barrier and provides an analysis & measurement of every substance jointly and severally. The entire Balance Sheet of the earth can come under Intangible and not the other way as it is made out.
9. SAP analysis done on the basis of Intangible measurement is available at http://bit.ly/lUyQS5 for download, that can give a view of intangible in action for a uniform study for all companies.
Thanks to Mary Adams for her initiatives in connecting the dots. Love to hear from you further on this. I found a restriction of 2000 characters for posting as a reply at ICKC and hence sending it as an email. This ca be disclosed to any of ICKC members.
Thanks and regards,