. BackgroundAccountingstandard setters are faced with the challenge of upholding andimproving the quality of financial reporting domestically, whilesimultaneously encouraging the development of a high-quality globalfinancial reporting framework. The Financial Accounting Standards BoardFASB has placed on their agenda a project entitled, â??Disclosure ofInformation about Intangible Assets not Recognized in FinancialStatementsâ?. The European Commissionâ??Enterprise Directorate Generallaunched an Invitation to Tender for a â??Study on the measurement ofintangible assets and associated accounting practicesâ?.Thistender could be consideredâ??at least in the intention of theDirectorate-Generalâ??s peopleâ??as â?¦ European responses to the studies â?¦carried out in the United States â?¦ on the subject of intangibles andintellectual capital. Stephano Zambon accountingeducation.comThecriticisms about the inadequacy of Generally Accepted AccountingPrinciples GAAP to report upon information-age activities has reachedan all-time high. The terms used to describe current GAAP in thefinancial press runs from â??inadequateâ? to â??lousyâ?, with a colorfulassortment of adjectives in the middle. Fortune April describesaccounting rules as irrelevant, making them the very antithesis of theobjectives of financial reporting. Such popular press commentsillustrate the frustration that others, outside the accountingprofession, feel in trying to understand the nexus between financialreporting results and corporate performance. Given that theconstituency of the accounting reports is the public, and that thepublic generally receives its information through the financial andother press, the dissatisfaction with financial reporting argues thatthe mandate of the profession to generate financial reporting standardsmay be threatened.Accounting standard setters have historically been faced with the trade-off between relevance and reliability. The three major objectives of financial reporting US are to provide information that is useful for:â?¢ making business and credit decisions;â?¢ assessing the amount, timing, and uncertainty of cash flows;â?¢ reporting enterprise resources, the claims on the resources, and the changes therein.Therehas been an evolution toward a worldwide consensus that financialstatements should provide decision-useful financial information. Theprecise wording of the concepts statements or objectives ofstandard-setting organizations is not the issue; relevance and reliability US, or true and fair UK. What matters are the results of the standards produced in terms of integrity, comparability, and transparency.The Hierarchy of Accounting Qualities lists relevance and reliability as the primary qualities that should beembodied in reported numbers. Relevance is defined as the quality ofinformation that has the capacity for making a difference in a decisionWhereas the definition of reliability include both verifiability andrepresentational faithfulness. The trade-off decision between relevanceand reliability is guided by the accounting professionâ??s hallmark ofconservatism prudence. The recognition of all inherent risks anduncertainties. In the UK, the pursuit of true and fairreports permit overriding accounting standards. InternationalAccounting Standards emphasize conformance to principles, more thanspecific rules, where the fundamental criterion is that the statementsfairly reflect the underlying economic reality of the business.Historically,intangibles have always been considered â??riskyâ? assets. Assets areeconomic resources with future service potential. In general, it ismore difficult to measure the future service potential of intangiblesthan the benefits accruing from investment in property, plant, andequipment., With few exceptions, accounting standards require the expensing of all internally-generated intangibles .However, in todayâ??s economy, value is being created by intangibleintellectual capital. The Accounting Profession has not met thechallenge of measuring and reporting the results of knowledge-basedentities. A continued failure to effectively address this issueundermines the credibility of reported earnings, and therefore theassociation between such earnings and stock market valuations .It is the contention of this author that the measurement and reportingof intangibles intellectual capital is consistent with current GAAP., It is the purpose of this paper to provide evidence thereof, andcompare US/UK and IASC Standards relative to Intangibles. Comparisonsand evaluations are being presented in an effort to facilitateimprovements and convergence.