SYNOPSIS
The North American corporate landscape is undergoing a $30 trillion transformation amid what many consider the fourth or fifth industrial revolution. Nearly half of the $60 trillion in stock market capitalization at the end of 2024 was driven by companies whose primary assets are intangible. This paper highlights the shortcomings of traditional accounting models when applied to modern, technology-driven firms. I propose several solutions to bridge these gaps, with particular emphasis on the most debated reform: recognizing internally developed intangible assets on the balance sheet. The discussion offers practical insights for professionals who are unfamiliar with recent developments or the ongoing controversy in this area. I also raise several questions that merit further research to enhance the relevance and reliability of financial reporting for contemporary corporations.
JEL Classifications: M41.
