{"id":12575,"date":"2021-09-16T08:41:25","date_gmt":"2021-09-16T07:41:25","guid":{"rendered":"https:\/\/brandfinance.com\/?post_type=press-release&#038;p=12575"},"modified":"2021-10-01T10:29:42","modified_gmt":"2021-10-01T09:29:42","slug":"microsoft-overtakes-apple-to-become-worlds-most-intangible-company","status":"publish","type":"press-release","link":"https:\/\/brandfinance.com\/press-releases\/microsoft-overtakes-apple-to-become-worlds-most-intangible-company","title":{"rendered":"Microsoft Overtakes Apple to Become World\u2019s Most Intangible Company"},"content":{"rendered":"\n<ul class=\"wp-block-list\"><li><strong>With an intangible asset value of nearly $2 trillion, Microsoft becomes world\u2019s most intangible company, overtaking Apple, Saudi Aramco, and Amazon, as Microsoft Teams keeps global economy running through COVID-19 lockdowns<\/strong><\/li><li><strong>Corporates booming \u2013 global intangible value has grown by nearly a quarter over past two years of pandemic, from $61 trillion in 2019 to $74 trillion in 2021<\/strong><\/li><li><strong>Over past 25 years, intangibles have seen astronomical growth \u2013 increasing 1145% from estimated $6 trillion in 1996. At this historic rate of change, global intangibles could be worth $1 quadrillion by 2050.<\/strong><\/li><li><strong>Brand Finance and International Valuation Standards Council call for more comprehensive reporting of intangible asset value to facilitate investor understanding and economic recovery post-COVID<\/strong><\/li><\/ul>\n\n\n\n<p><a href=\"https:\/\/brandirectory.com\/reports\/gift-2021\" target=\"_blank\" rel=\"noopener\">View the full Brand Finance GIFT\u2122 2021 report here<\/a><\/p>\n\n\n\n<p>Every year, the Brand Finance Global Intangible Finance Tracker (GIFT\u2122) report ranks the world\u2019s largest companies by intangible asset value.<\/p>\n\n\n\n<p>This year\u2019s number one company in terms of total estimated intangible value is <strong>Microsoft <\/strong>(US$1.90 trillion), which has jumped from 4<sup>th<\/sup> position in 2020 to overtake <strong>Apple <\/strong>(US$1.87 trillion), <strong>Saudi<\/strong> <strong>Aramco <\/strong>(US$1.64 trillion), and<strong> Amazon <\/strong>(US$1.47 trillion). Microsoft Teams has become embedded into business life for global organisations, once again proving the value of Microsoft\u2019s ability to innovate and roll-out at scale. Microsoft is investing heavily in its business suite solutions. Although Apple is the more valuable company by approximately $200 billion, Microsoft is estimated to have more intangible value with its portfolio of brands and business operations.<\/p>\n\n\n\n<p>Intangible assets are identifiable, non-monetary assets without physical substance. Intangible assets can be grouped into three broad categories \u2013 rights (including leases, agreements, contracts), relationships (including a trained workforce), and intellectual property (including brands, patents, copyrights).<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1379\" height=\"776\" src=\"https:\/\/brandfinance.com\/wp-content\/uploads\/2021\/09\/GIFTImage1.jpg\" alt=\"\" class=\"wp-image-12576\" srcset=\"https:\/\/brandfinance.com\/wp-content\/uploads\/2021\/09\/GIFTImage1.jpg 1379w, https:\/\/brandfinance.com\/wp-content\/uploads\/2021\/09\/GIFTImage1-450x253.jpg 450w, https:\/\/brandfinance.com\/wp-content\/uploads\/2021\/09\/GIFTImage1-768x432.jpg 768w\" sizes=\"auto, (max-width: 1379px) 100vw, 1379px\" \/><\/figure>\n\n\n\n<p><strong>Intangible assets boom during COVID-19 pandemic<\/strong><\/p>\n\n\n\n<p>Over the past year in particular, global intangible asset value has grown faster than usual, and at $74 trillion it exceeds pre-pandemic levels by nearly a quarter, having increased 23% compared to $61 trillion in 2019. The COVID-19 pandemic has demonstrated even further the importance of people, innovation, reputation, and brand for businesses all around the world. Intangible assets are now unequivocally a boardroom priority.<\/p>\n\n\n\n<p>Increases through the pandemic were primarily fuelled by the growth of the world\u2019s largest organisations which were resilient to investor uncertainty due to their scale and their focus on technologies which we continued to rely on through lockdowns. This year, growth has been driven by China and the USA, with several industries recovering from the downturn in 2020.<\/p>\n\n\n\n<p>David Haigh, Chairman &amp; CEO, Brand Finance Plc, commented:<\/p>\n\n\n\n<p><em>\u201cIn times of crisis, brands \u2013 especially those most valuable and strongest in their categories and markets \u2013 become a safe haven for capital. 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.\u201d<\/em><\/p>\n\n\n\n<p><strong>Global intangible value grows by over 1000% in 25 years<\/strong><\/p>\n\n\n\n<p>25 years ago \u2013 when Brand Finance was established \u2013 global intangible assets were worth only an estimated $6 trillion, less than a tenth of the same value today. As of September 2021, global intangible assets are worth over $74 trillion. This is a 1145% growth over 25 years \u2013 approximately 11% per annum.<\/p>\n\n\n\n<p>Annie Brown, Associate at Brand Finance, and author of the GIFT\u2122 report, commented:<\/p>\n\n\n\n<p><em>\u201cIt is a pivotal moment in financial reporting for intangibles. Total estimated intangible value has grown by over 1000% in the past 25 years. At the same rate, total global intangible value could stand at over $1 quadrillion by 2050 (that is $1,000,000,000,000,000). As investors grapple with balancing various issues such as Climate Change and ESG over the coming years, it is essential that the data they need to understand these vast sums is readily available.\u201d<\/em><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"2134\" height=\"1200\" src=\"https:\/\/brandfinance.com\/wp-content\/uploads\/2021\/09\/MicrosoftTeams-image-32-2134x1200.jpg\" alt=\"\" class=\"wp-image-12600\" srcset=\"https:\/\/brandfinance.com\/wp-content\/uploads\/2021\/09\/MicrosoftTeams-image-32-2134x1200.jpg 2134w, https:\/\/brandfinance.com\/wp-content\/uploads\/2021\/09\/MicrosoftTeams-image-32-450x253.jpg 450w, https:\/\/brandfinance.com\/wp-content\/uploads\/2021\/09\/MicrosoftTeams-image-32-768x432.jpg 768w, https:\/\/brandfinance.com\/wp-content\/uploads\/2021\/09\/MicrosoftTeams-image-32-1536x864.jpg 1536w, https:\/\/brandfinance.com\/wp-content\/uploads\/2021\/09\/MicrosoftTeams-image-32-2048x1152.jpg 2048w, https:\/\/brandfinance.com\/wp-content\/uploads\/2021\/09\/MicrosoftTeams-image-32.jpg 2500w\" sizes=\"auto, (max-width: 2134px) 100vw, 2134px\" \/><\/figure>\n\n\n\n<p><strong>Internally generated intangibles should be recognised in financial reports<\/strong><\/p>\n\n\n\n<p>The majority of intangible assets are not recognised, due to the limitations set by the financial reporting rules, which state that internally generated intangible assets such as brands cannot be disclosed in a company balance sheet.<\/p>\n\n\n\n<p>David Haigh, Chairman &amp; CEO, Brand Finance Plc, commented:<\/p>\n\n\n\n<p><em>\u201cInvestors should not be deprived of this critical information. Intangible assets such as strong, valuable brands and innovative technology can be the differentiators that drive a $2 billion company to $2 trillion in 25 years \u2013 as witnessed with Apple. This information vacuum for investors is part of the reason why Brand Finance endeavours to estimate the extent of \u201cundisclosed intangible value\u201d in our GIFT\u2122 study each year.\u201d<\/em><\/p>\n\n\n\n<p>To truly aid investors and provide them with useful information, we believe management should be allowed and required to:<\/p>\n\n\n\n<ol class=\"wp-block-list\" type=\"1\"><li>Identify the key intangibles of the entire business \u2013 both internally generated and acquired.<\/li><li>Provide an opinion on the value of those intangibles in the notes to the financial statements.<\/li><li>Provide an opinion of the overall business value at the reporting date, to help investors to understand whether or not their capital is allocated efficiently.<\/li><\/ol>\n\n\n\n<p>Kevin Prall, Technical Director, International Valuation Standards Council (IVSC), commented:<\/p>\n\n\n\n<p><em>\u201cDespite the importance of intangible assets to the capital markets, only a small percentage are recognised on balance sheets, typically via acquisition from a third-party transaction. The pandemic has further exacerbated the disparity between market values and book values for those industries most reliant on brands, technology, and human capital for value creation. The IVSC supports Brand Finance, and all others, that look to make progress on this most critical issue.\u201d<\/em><\/p>\n\n\n\n<p><a href=\"https:\/\/brandirectory.com\/reports\/gift-2021\" target=\"_blank\" rel=\"noopener\">View the full Brand Finance GIFT\u2122 2021 report here<\/a><\/p>\n\n\n\n<p><strong>ENDS<\/strong><\/p>\n\n\n\n<p><strong>Notes to Editors<\/strong><\/p>\n\n\n\n<p>The <a href=\"https:\/\/brandirectory.com\/reports\/gift-2021\" target=\"_blank\" rel=\"noopener\">Brand Finance Global Intangible Finance Tracker (GIFT\u2122) report<\/a> is the world\u2019s most extensive annual research exercise into intangible assets, considering over 59,000 publicly quoted companies (with a total value of over US$120 trillion) across 150 jurisdictions.<\/p>\n\n\n\n<p>In its analysis, the <a href=\"https:\/\/brandirectory.com\/reports\/gift-2021\" target=\"_blank\" rel=\"noopener\">Brand Finance Global Intangible Finance Tracker (GIFT\u2122) report<\/a>&nbsp;provides detailed insight into intangible value reporting by company, sector, and country. Consult the report document for graphs, additional insights, and opinion pieces by our experts.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>With an intangible asset value of nearly $2 trillion, Microsoft becomes world\u2019s most intangible company, overtaking Apple, Saudi Aramco, and Amazon, as Microsoft Teams keeps global economy running through COVID-19 lockdowns Corporates booming \u2013 global intangible value has grown by nearly a quarter over past two years of pandemic, from $61 trillion in 2019 to [&hellip;]<\/p>\n","protected":false},"featured_media":4452,"comment_status":"closed","ping_status":"closed","template":"","tags":[27,36,35,79,49,45,33,185,105,127,30,29],"class_list":["post-12575","press-release","type-press-release","status-publish","has-post-thumbnail","hentry","tag-africa","tag-australia","tag-canada","tag-gift","tag-india","tag-ireland","tag-singapore","tag-sri-lanka","tag-sweden","tag-uae","tag-uk","tag-usa"],"acf":[],"_links":{"self":[{"href":"https:\/\/brandfinance.com\/wp-json\/wp\/v2\/press-release\/12575","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/brandfinance.com\/wp-json\/wp\/v2\/press-release"}],"about":[{"href":"https:\/\/brandfinance.com\/wp-json\/wp\/v2\/types\/press-release"}],"replies":[{"embeddable":true,"href":"https:\/\/brandfinance.com\/wp-json\/wp\/v2\/comments?post=12575"}],"version-history":[{"count":9,"href":"https:\/\/brandfinance.com\/wp-json\/wp\/v2\/press-release\/12575\/revisions"}],"predecessor-version":[{"id":12610,"href":"https:\/\/brandfinance.com\/wp-json\/wp\/v2\/press-release\/12575\/revisions\/12610"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/brandfinance.com\/wp-json\/wp\/v2\/media\/4452"}],"wp:attachment":[{"href":"https:\/\/brandfinance.com\/wp-json\/wp\/v2\/media?parent=12575"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/brandfinance.com\/wp-json\/wp\/v2\/tags?post=12575"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}