Imagine an unlimited way to create value.
Imagine an unlimited resource in your company.
Configure, and exploit, a Value Center.
In Intangible Accounting, a Value Center is the representation of an Intangible Value production place containing at least an activity and at least a Human involved in this activity, which generates Intangible Assets for the Company.
Value Centers are built around activities with a strong impact on the Company Value part of the Goodwill.
These Value Centers will be, for the Intangible Assets Accounting, equivalent to the Account for the Tangible Accounting.
VALUE CENTER = ACCOUNT
The Account is the Accounting primary component, is a record in the general ledger that is used to sort and store transactions values.
So, in the Intangible Assets Accounting the “VALUE CENTER” records the Fair Value from the “Value Transactions” in non monetary unit but, possible in different Transactions cryptocurrencies.
A Value Center can have only one non monetary currency, but the Value Transaction when the Fair Value is validated, can also contain value unit conversion, dependent of the Value Center measurement unit involved in the transaction.
A Tangible Accounting is based on the equality between the Debit and the Credit cross the Business Transaction, at least two accounts are always impacted, with a debit entry being recorded against one account and a credit entry being recorded against the other account. There is no upper limit to the number of accounts involved in a transaction. The totals of the debits and credits for any transaction must always equal each other, so that an accounting transaction is always said to be "in balance."
In the Intangible Assets Accounting the Value Center (as an Account) has Debit and Credit, the DEBIT is increasing the Value Center “consumed value” and CREDIT column counts the value created by these Value Center, AFTER a Fair Value validation done directly between the Supplier of the Value Contribution included in the Value Transaction and the Purchaser of the Value Contribution.
A single Value Contribution , is coming from a single Supplier Value Center , but can be many different Purchasing Value Centers FOR THE SAME VALUE CONTRIBUTION and the Value Transaction for the SAME Intangible Assets can have different values and different measurement units depending on the measurement unit specific to the Purchase Value Center, but specially depending of the Context, in which the Purchase Value Center is Creating Business and Corporate Value.
The UNIQUE RULE in Intangible Assets Accounting IS THE FACT THAT INTANGIBLE ASSETS IS CREATED ONCE AND CAN BE DELIVERED MANY TIMES.
So, we can have in Debit “consumed “100 value units and in Credit we can “Sell” by fair value validation 1000 value units with many Purchase Value Centers. An unlimited resource, isn't it?
Even if the Value Center didn’t “consume “any Value Contribution, it can just CREATE by himself 1000 value units with the Value Contribution created by him and “sold” to the Purchaser Value Centers based on fair Value validated Transactions.
Intangible Assets Accounting Is NO RULE for the “Equality” between Debit and Credit column in the Value Center structure.
The Value Center more are units in the Credit Column compared with Debit column (consumed value units) more the Value Center is Intangible Value Creator of Intangible Assets.
Value Center can be: A Product development Project, a Community focused to create a new Knowledge, or to transform existent Knowledge in validated Competence, a Partnership with a Business Partner, Customer Partnership, Supplier Partnership, developing new technology, create new digital business model...
The Intangible Value Transactions located in these Value Centers contribute to develop Intangible Assets ready to be transparently “Identified, Develop, and being Measured “through a validated Fair Value negotiated process, the Assets are fulfilling the FASB and IAS rules to figure like Intangible Assets in the Company Accounting reports.
The Intangible Assets Accounting system can, like the traditional Accounting through the Account, identify the Value Stream generated by an activity or group of activities done by one Human or group of Humans during these activities.
Each Value Center must contain at least an activity and have at least a human involved in these activities.
Intangible Value and Assets are produced ONLY by Humans of course with the help of machines, robots and computers programs, but all of them created initially by the Human.
The Tangible Accounting Income statement accounts are used to sort and store transactions involving: Operating revenues, Operating expenses, Non-operating revenues and gains, Non-operating expenses and losses.
Large companies may have thousands of income statement accounts in order to budget and report revenues and expenses by divisions, product lines, departments, and so on.
The Intangible Accounting, may have also thousands of Value Centers around activities generating income and Intangible Assets connected to these activities related to: Customer relations or Suppliers relations, Business Alliances relations, Market Developing strategy, but also Competitive advantage, R&D, ...
In the Tangible Accounting one or many activities are connected to one or many Accounts but in the Intangible Assets Accounting an activity is included in ONLY ONE Value Center.
In the Intangible Assets Accounting, the Intangible Value generated by an activity is sourced from ONLY ONE Value Center.