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The so-called New Economy with its fundamental intangibles, such as R&D, intellectual properties, knowledge recipes, etc. is waiting more insightful reporting. This will avoid the sentiments and high volatility on the stock exchanges as well as avoiding management behavior resulting in cost cutting, labor lay off, etc.
Ten years ago, in September 1991 Skandia appointed me as the world's first Director of Intellectual Capital-IC. This Year University of Lund has appointed me to the world's first professorship on IC. So, my comments on this subject are very much influenced by at least 10 years of perspective.
In May 2001, the Chairman of FASB-Federation of Accounting Standard Board in USA officially stated the importance of making financial reporting much more transparent.
He recommended organizations to increase the transparency of intangibles by reporting on them in a kind of supplementary approach to the traditional balance sheet in the annual reports, very much along the prototyping approach I applied in Skandia. Now in October 2001, the new Chairman of SEC-Securities and Exchange Commission in USA, Mr. Harvey Pitt, declared a strong need to overhaul the financial reporting system to include intangibles.
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