Capitals may be classified as tangible or intangible.
Intangible assets are defined as identifiable,
non-monetary assets without physical substance. The organization controls and holds these assets for use in the production or supply of goods or services, for rental to others, or for administrative
purposes. The tangible or intangible assets are purchased or generated by the organization. They may even be owned by third parties. Prevailing accounting regulations seriously limit the ability to recognize internally generated intangible assets on the balance sheet. As a result, their valuations are
“back stage” in financial statements. Integrated
reporting aims to change that by giving intangibles and externalities a place in corporate reporting.