In search of standards

It looks like the International Standard Organization (ISO) is taking up the issue of intangible valuations. Last year, at the urging of the German Standards Institute (DIN - Deutsches Institut für Normung), the ISO formed a ISO Project Committee for Brand Valuation:

The project proposal presented to ISO, the International Organization for Standardization, was based on guidelines set down by DIN's Performance Capability and Services Standards Committee in cooperation with Markenverband e. V. - who represents the interests of German trademark holders - and numerous other stakeholders. Their motivation was the introduction of the "International Accounting Standards" which allow, under certain circumstances, the inclusion of brand values in financial statements.

Committee participants include financial and other service providers, and representatives from research organizations and high-profile industrial firms; the active participation of the latter shows the relevancy of the subject.

It is expected that the standard will be published in 2010.

Now DIN is pushing the formation of a similar project for patent valuations - see Developing a patent valuation standard, ISO moves to establish a global standard for patent valuation - Intellectual Asset Management and More on the moves to establish an international standard for patent valuation - Intellectual Asset Management. According to Dr. Alexander J. Wurzer, who is heading up the work at the German Institute:

The International Organization for Standardization, ISO, has published a new work item proposal for the standardization of patent valuation processes. The proposal was initiated by the German Institute for Standardization, DIN, and is based on a publicly available specification PAS 1070 “General Principles of Proper Patent Valuation" (SAB1), published in 2007.
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ISO followed that initiative and will appoint a committee to develop an ISO-standard for patent valuation if all relevant and concerned groups articulate their interest to ISO through their national standardization bodies.

The relevant body in the US is the American National Standards Institute (ANSI). ANSI is going through the formal process of reviewing the proposal (comments are due by today as it turns out and voting by member organizations closes in March). This could be an interesting, but difficult project. The process of setting international standards is fraught with national and international politics on top of the already difficult technical issues. Nor am I sure that ISO is the right organization for setting financial standards. But if an agreed upon standard for valuing intangibles can be found, it will be a major step forward toward regularizing their role in the financial system.