I am pleased to be a member of the Garten Commission and I am committed to working with the FASB to address the intangibles issue. Efforts such as this will deliver both transitional and permanent solutions that enable a well thought out, prepared evolution to improved accounting methods and systems. The people that FASB is concerned about are our investors and other capital providers. We should ensure that they have the best information possible about knowledge-based companies. There is a need to determine whether and how to identify and value intangible assets like technological know-how and employee talent.
Technology companies concede that there are issues associated with the treatment of intangibles.
Today's purchase accounting method, however, is not the answer. It does not solve the intangible asset issues, adequately represent corporate performance, or reflect the value of a successful business combination. I am not here to ask Congress to make accounting rules or to ask FASB to make economic policy. Only that we work together to undertake a thoughtful, fundamental review of the treatment of intangible assets that does not derail innovation and economic growth. Under Chairman Jenkins' leadership, the Board has raised some important issues that require attention.