CorporateMOM
Corporate Management Orbiter Mission.
Podcast Episode 93 7-06 Why do we need ICGI – Capitalization
7-06 Why do we need ICGI – Capitalization.mp3
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Podcast Episode 93 7-06 Why do we need ICGI – Capitalization
Here are 5 key points summarized from the transcript:
1. The need for ICGI (Institute of Corporate Governance of India) arose from issues related to accounting practices and accountability.
2. In 1985, there were challenges with capitalizing R&D expenditures and brand values, which led to the introduction of accounting standards like IAS 38 for intangible assets.
3. The distinction between short-term (profit and loss) and long-term (capitalized) accounting practices was explained.
4. The millennium merger of AOL takeover of Time Warner is a case in point, creating a $335 billion company, proving that in a world ruled by finance, intangible assets rather than real assets are the indicator of real wealth.
5. Companies like WorldCom manipulated profits by improperly capitalizing expenses, leading to significant losses and demonstrating the need for better corporate governance.
Auditors lost control. We will look into why ICGI is important.
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