Page 45 - newDATAmagazine | 02>06>2021
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newDATA
MAGAZINE
Mastering the
Data Monetization Roadmap
Senior executives trained in accounting of profitability depending upon physical
continue to struggle to understand how to assets—an accounting model for the Industrial
determine the value of their data. The article Age, not the Information Age.”
“'Why Your Company Doesnt Measure The This paragraph reflects how a traditional
Value Of Its Data Assets” written by Doug accounting mindset, in the age of digital
Laney (by the way, why does the Forbes web assets, is focused on the wrong valuation
site absolutely bury the reader in ads?) method – trying to represent value using an
contains a telling comment from a senior artificially-defined balance sheet that doesn't
accounting firm partner: capture how today's companies are using data
“… balance sheets and income statements to create new sources of customer, product,
which form the backbone of today's accounting and operational value.
system now fail to capture significant sources of Nothing says “We really don't know how to
value in our economy. He said that the quantify value in the digital age” better than
measurements we use don't reflect all the ways Figure 1 where a significant percentage of the
that companies create value in the New Economy, most valuable firms' “value” is credited to
and this lack of transparency results in undue nebulous intangible (non-physical) assets.
market volatility and mere “guesstimates” by And the discrepancy in the creation of value
investors in valuing companies. Even the between traditional physical assets and
chairman of the AICPA stated that the accounting intangible digital assets is growing
model is out of date and based on the assumption exponentially.
Figure : Increasing Percentage of Most Valuable Firms defined by Intangible Assets
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