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SINGAPORE: New Disclosure Framework Aims to Help Companies Improve Transparency Around Intangible Assets

The Intellectual Property Office of Singapore and the Accounting and Corporate Regulatory Authority have jointly launched the Intangibles Disclosure Framework (Framework), which provides guidelines to companies for identifying and disclosing various non-physical assets or intangibles, including intellectual property (IP) rights, to various stakeholders.

  1. Strategy—helps companies share and communicate how intangibles are relevant to, and used in, a company’s overall corporate strategy;
  2. Identification—recommends companies classify their intangibles into six categories based on their nature and characteristics, thereby facilitating and improving comparability;
  3. Measurement—guides companies to better assess the performance of its intangibles, ideally through quantitative, relevant drivers and metrics. The disclosure of the monetary value of a company’s intangibles is optional under this pillar; and
  4. Management—guides companies to disclose methods used to identify, assess, and manage the risks and opportunities related to their intangibles.

The six categories of intangibles under the “Identification” pillar are as follows:

  1. Marketing-related, such as trademarks and trade dress;
  2. Customer-related, including clientele and order books;
  3. Artistic-related, covering creative content—for instance, magazines, videos, and drawings;
  4. Contract-related, such as licensing, royalties, and franchises;
  5. Technology-related, including patented and unpatented proprietary technology; and
  6. Human capital–related, such as key leadership competencies of management staff, software developers’ skills, and so on.

The Framework is one of the first such initiatives globally, and a step toward the Singapore Intellectual Property Strategy 2030, which aims to strengthen the nation’s position as a global intangibles and IP hub.

It is envisaged that the harmonized disclosures under the Framework will allow stakeholders to make more informed assessments of companies and their financial prospects, facilitating the commercialization of intangibles, while also allowing investors and lenders to review companies comparatively, improving the flow of funds into companies that invest wisely in intangibles.

In addition to the Framework, three other initiatives to help companies manage their IP also came out on September 4, 2023:

  1. The GoBusiness IP Grow platform, connecting companies with a suite of service providers and resources, as well as an online tool for live and customized recommendations;
  2. The IP Ready program, pairing companies with an IP strategist for the development and institutionalization of strategy, management, and skills-building for long-term business growth; and
  3. The Singapore Business Federation, helping companies build IP capacity and provide in-market assistance to local companies via access to GlobalConnect@SBF’s internationalization services, market advisors, and global contacts.

This article was first published by the International Trademark Association on inta.org.