For people in finance, accounting’s approach to value is deeply troubling. Representations on balance sheets deliberately leave out a company’s most valuable assets because of the idea of “conservatism”: accountants give zero value to assets that they can’t value precisely. In fact, the most valuable assets of companies like Coca-Cola, Apple, and Facebook (their brands, intellectual property, and user community) never show up on balance sheets. It gets worse. Because of the principle of historic cost accounting—that assets should be represented at their acquisition price—some assets are listed
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