35. Predicting how accounting standards may evolve to include data

The global accounting frameworks that govern how businesses report their financial position were largely designed in an era when value resided in physical assets — factories, machinery, and inventory. Data was not part of the equation. Today, however, some of the world's most valuable companies hold assets that weigh nothing and occupy no warehouse shelf. The growing mismatch between what balance sheets show and what businesses are actually worth has placed pressure on standards setters to rethink how intangible assets, and data in particular, are recognised and measured in financial reports.

The International Accounting Standards Board and its counterparts in North America and elsewhere have long debated how to handle intangibles. Current rules under IFRS and US GAAP allow internally developed intangible assets to be recognised only in very narrow circumstances, and self-generated data assets are largely excluded. The result is a systematic understatement of value for data-intensive businesses. Several major accounting bodies have now launched consultation processes exploring whether and how data assets should be captured on the balance sheet. Early proposals focus on defining what qualifies as a measurable data asset, establishing consistent valuation methodologies, and introducing disclosure requirements that would at least make data holdings visible to investors even if full capitalisation remains controversial.

What is likely to emerge over the next decade is a phased approach. In the near term, expect enhanced disclosure requirements that ask companies to describe their data assets, their governance practices, and any material risks associated with those assets, without necessarily assigning a monetary figure on the face of the balance sheet. Over time, as valuation methodologies mature and are tested across industries, standards may permit or require the recognition of data assets meeting specific criteria. Businesses that have invested in data governance, quality management, and formal valuation processes will be far better positioned to comply with whatever emerges than those that have treated data as an invisible background resource.

For finance teams and CFOs, the practical implication is that waiting for the standards to settle before taking data valuation seriously is a risky strategy. Companies that begin building rigorous data inventories and commissioning independent valuations now will have credible evidence to support future reporting requirements. They will also be ahead of investors, auditors, and regulators who are increasingly asking hard questions about what data a company holds and what it is worth. The evolution of accounting standards is not a distant theoretical concern — it is a business readiness issue that deserves attention on the finance agenda today.