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Intangibles and R&D

Eunice

Intangibles and R&D

Intangibles for Nike Inc. are reported under the goodwill and intangible subtopic. They form part of the notes to the company’s statement of financial position. In the notes to the statement of financial position, Nike Inc. reports that intangible assets are tested for impairment annually (SEC, 2024). Notably, this is done to report on the correct and true value of the intangible assets for every fiscal period: Intangibles and R&D.

It is a requirement that the company reports any material changes in intangible assets. Further, the company reports research and development in the notes to the financial statements. There is a requirement for the company to report any material changes to intangible assets. When there are no such changes, the company is required to report that no material changes occurred.

Adidas also reports its research and development and intangible assets under the notes to the financial statements. In the notes, the company reports that it is required to report investments made toward research and development (Addidas, 2024). Also, this is the case for intangible assets; however, they do not state specific circumstances that drive this reporting.

I reviewed the reporting done by the two companies in the 10-k forms. What stood out is the details that are included in the forms regarding explaining everything that is stated in the financial statements. Every detail that is briefly mentioned in the financial statements is given a discussion in the notes section.

However, I have questions regarding the criteria for determining how much to disclose in the notes section. Notably, this is so because I believe there is other information that companies do not wish to disclose, only that they are legally required to do so. The notes section can form an escape route to scanty details reporting.

Subsequently, intangible assets for Nike Inc. for 0.67% of their total assets. Adidas’ intangible assets consist of 14. 07% of total assets. This shows that the two companies could have different policies regarding maintaining intangible assets in their asset portfolio.

References

Adidas. (2024). Annual Report. https://report.adidas-group.com/2023/en

SEC. (2024). Nike Inc. 10-k forms. https://www.sec.gov/Archives/edgar/data/320187/000032018724000044/nke 20240531.htm

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Question

Company: Nike  and Adidas

Topic: Intangibles and R&D

  1. Where in your companies’ most recent 10-K do they report items related to this topic? It may be included in the income statement, the balance sheet, or the notes. It may have its own line-item or it may be summarized into a broader category. After reading and studying the chapter, identify what the companies should be reporting and where it should be. Distinguish between required reporting and reporting that will only happen under specific circumstances.
  2. Look for and read through your companies’ reporting on this topic. What stands out to you in their reporting? What elements of their reporting do you have questions about? List some of those questions here so we can address them in class.
  3. What percentage of each company’s total assets are intangible assets? What does this tell you about each company?

    Intangibles and R&D

    Intangibles and R&D

Client’s Notes:
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