The document discusses overhauling budgeting by measuring return on intangible assets rather than return on investment. It proposes rating companies on a scale of 0-5 based on their policies, value systems, and adherence to policies and values, which would indicate their "intangible value capital". This aims to encourage investment in sustainable companies focused on quality over short-term profits. The document also discusses relating compensation and valuations to the mass added by companies' intangible capital. Overall it argues that focusing on intangible assets can improve market stability and confidence by prioritizing sustainability.

1. Planning & Budget:
Measuring by Return On Intangible
An IBCM© Research Presentation
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2. Overhaul Budgeting by 180°
Corporates and Governments have come to depend on Budgets as a
primary tool for setting growth targets.
Reeling under Corporate Toxic assets and government impaired assets,
people are looking for a way out.
People contribution to Provident Funds, Mutual Funds, Pension Funds
of hard earned money of over 40 years constitute the biggest chunk of
funds available for market investment.
Only a few corporates have sustainable energy on whose capability
Market rests.
Overhaul Budgeting by 180° is to bring to fore capable trustworthy
companies where People can invest confidently, at a time investments
in public equities are at historical lows. How? By measuring RoI of
companies: turning 180° from Return on-Investment to Return on-
Intangible.
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3. Opposite Value - at 180°
Truth involves completely opposite values; then only, it can be Truth.
In the subject-object distinction of corporate management Balance
Sheet represents the man-made objects and their characteristics. The
subject responsible for creating them comes as a footnote of a
signature.
Both subject - object have energy - pulsating energy of the subject and
non-pulsating energy of the inanimate objects, one is creative and
the other inert.
Market dances according to the tunes set by inanimate objects that slip
into oblivion by the closing bell. Market stability is attained by
measuring the opposite values i.e. pulsating energy of corporate
management.
Truth is Balance Sheet hides it.
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4. Resource energy
Notwithstanding the accounting convention of asset or liability,
inanimate objects that occupy a Balance Sheet, inert, sitting smugly
unaware of the rest, are bound up with huge energy waiting to be
liberated.
By itself an object cannot liberate the energy unless a collision takes
place triggered by the pulsating-energy. That pulsating-energy is
common from a potter to a nuclear scientist, the cause that would
trigger the release of the respective non-pulsating energy.
Corporate Management has only one source of energy which is
pulsating-energy. That energy is Intangible.
Intangible job description is a. Create Infrastructure, i. Policies, ii. Value
System and iii. Inanimate objects and b. liberate energy from
inanimate objects in infinite succession of finite purposes.
Intangible is the only resource area for creative process as well as
action process of corporate management.
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5. Value ~ Valueless
Infinite succession of finite Inanimate objects give an impression of
being in motion but indeed they change from one static frame to
another, by the impact of Intangible.
Huge energy is bound up in every object, bigger the mass bigger the
energy. A toxic or impaired asset has no mass and has no energy.
Balance Sheet is a convoluted process of exhibiting self-deception.
What is crucial is to bring the abstractions into reality, acknowledge
value where value is due, and deconstruct what is valueless.
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6. Intangible - A hole-in-one
St. Augustine: "What art thou doing,
my child?"
"I mean to empty the sea into the
hole," answered the child, busily
going backwards and forwards with
his spoon.
By Subject - Object distinction of
Management, entire data of World
Economy is compacted in a small
hole of Intangible, arriving at a
single rating (0-5), where the rating
represents m mass in the equation
e = mc² where
e is the Intangible, the energy force.
Objects
(Subject) 6

7. Planning & Budget
1. Budgeting - Balance Sheet
i. Variance analysis - Advance it
ii. RoI - Return on Intangible
iii. Emotional Value Capital - Action Note: Planning & Budget is the third in the
series of Intangible Value Capital by IBCM©
Process Research:
2. Planning - Intellectual Value Capital
i. Creative Process 1. DIY - Corporate Rating:(http://bit.ly/QCo88r)
Three Principles - i. Real-time Monitoring, ii.
ii. Corporate Atomic Structure Study of Cost Consequence and iii.
iii. Rating (0 - 5) Participation of Society.
3. Intangible Value Capital
2. Investment Decisions for Pension Funds by
i. What really matters is m the mass Intangible Value Capital:
ii. People ( http://slidesha.re/PP945v) - Corporate
4. Knowledge Management Critical Density demands sustainability of
i. Return on Intangible three components - i. Efficiency, ii. Value
System and iii. Profits, to ensure that just
ii. Occupy Wall Street everything is just right.
Remarks, Reference
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8. 1. Budgeting - Balance Sheet
i. Variance analysis - Advance it
Resource Team
1: Budget - Breakdown to Daily Balance Sheet 1. People
2. Managerial
2. Resource Team for each block of 5 KPIs.
KPIs
3. Technology
4. Operational
3. Day 1: Opening Bell to start material events. 5. Finance
Material Event is when Intangible collides with tangible object.
4. On Closing Bell Day 1: Rating by IBCM©, for each block, by relative
efficiency to Budget Day 1 figures, to arrive at 0 - 5 rating of block(s).
5. Optimal rating (5) consistently by each block, Annual Budget targets
are met. Shortfall of even 1 KPI brings down the rating from 5 to 4.
7. Variance analysis: real-time, each object, 'study of cost consequence',
decision making advanced, corrective action effected, Accountability
measured - extrapolate to Annual Budget.
8. Each block ensures compliance to ethical and regulatory standards,
by resource team of (1. People) led by CSR-in-charge.
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9. 1. Budgeting - Balance Sheet
ii. RoI - Return on Intangible
1.Between 1998 when Grand Metropolitan and Rank Hovis McDougall,
decided to include the value of brand names in their consolidated
Balance Sheets, [Ref. 1], through Sep. 1998 when IAS 38 was
published and the financial crisis in 2008, in May 2011 frustration was
evident: “It is not clear that the so-called GAAP standard is even
particularly meaningful anymore: companies continue to search for
beneficial ways in which to disclose information about themselves with
or without formal sanction.” [Ref. 2].
2. RoI - Return on Investment is: Numerator - inanimate object &
denominator - same = 0 (zero)/ 0 (zero) = 0 (zero)
3. RoI - Return on Intangible: Numerator - Intangible present or absent (1
or 0) & Denominator - Intangible (1) = 1 or 0 (zero)
4. A Corporate or a Government is an inanimate object by itself. Material
events result in adding mass to the organisation.
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10. 1. Budgeting - Balance Sheet
iii. Emotional Value Capital - Action Process
Budgets, by corporates as well as governments, that are prepared with lot
of care, focus on objects.
Not surprisingly in the competitive spirit of corporates emotions run high and
in majority of cases create toxic assets than adding mass. Governments
on the other hand convert good intentions to wasteful expenditure and
broken promises, for the lack of any emotion.
Return on Intangible turns the attention on the action process of
management of objects. Optimal rating does not guarantee the non-
existence of toxic assets or impaired assets. What is needed is the
Intellectual Value Capital, a firm footing on Quality, to ensure RoI is
reliable.
Without Quality Corporates will find stranded in Emotional Value Capital
bereft of value, as many many are.
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11. 2. Planning - Intellectual Value Capital
i. Creative Process
1. Budgeting - Quantitative Elements - is an Action Process of
Management, measured by Emotional Value Capital.
2. Planning - Qualitative Elements - pertains to creative process of
Management, measured by Intellectual Value Capital.
•
The end product of a creative process is a tangible substance:
The beginning, subtle and non-existence.
3. Intellectual Value Capital.
– Intellectual Value Capital represents Quality of Corporate
Management and the cause of Emotional Value Capital,
establishing unique relationship with every single Object.
– Policies are rated by Intellectual Value Capital.
– Practices are rated by Emotional Value Capital.
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12. 2. Planning - Intellectual Value Capital
ii. Corporate Atomic Structure
Intellectual Value Capital: is fixed assets or Corporate Atomic Structure
proton of Corporate Atomic Structure.
Intellectual Value Capital
•
IPRs, Patents, Policies created are the basis -
of Practices to follow. +
•
has the same Resource Team of 5
categories but of managerial emphasis. +
-
•
6 stages to become a substance. Nucleus
+ Proton Policies
•
like Proton that has 1836 times the rest
mass of an electron, has huge energy Neutron People
•
has the same characteristics waiting to be - Electron Practices
liberated to release the energy - that rests on
Intangible. Emotional Value Capital
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13. 2. Planning - Intellectual Value Capital
iii. Rating (0 - 5)
1. Policies 2 Value System
Management Quality Human Rights
Accounting Quality Labour Rights
Corporate Governance Environmental
Risk Management Anti-Corruption
Resource Team Material Events
1. People
2. Managerial
3. Technology
KPIs
Creative Process Action Process
4. Operational Intellectual Value Capital Emotional Value Capital
5. Finance Measuring Policies & Measuring adherence to
Value System Policies & Value System
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14. 3. Intangible Value Capital
i. what really matters is m the mass
1. Intangible Value Capital: Rating of 0 to 5 indicates the mass added,
from bottom-up granular data for each Block of 5 KPIs.
2. Derived from Emotional Value Capital and Intellectual Value Capital.
3. Policies and Value System rated independently give strength to
Practices.
4. A company with optimised level of Profits at 5, by Madoffing and
Enroning will find Intellectual Value Capital at 0 (Policies at 0 and
Value System at 0). Intangible Value Capital will result in rating of 1.
Resource Team Intangible Value Capital
1. People
2. Managerial
3. Technology
KPIs
Creative Process Action Process
4. Operational Intellectual Value Capital Emotional Value Capital
5. Finance Measuring Policies & + Measuring adherence to /2
Value System Policies & Value System
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15. 3. Intangible Value Capital Resource Team
1. People
ii. People 2. Managerial
KPIs
3. Technology
4. Operational
5. Finance
1. Material Energy: Is the energy liberated by Intangible, the only source to
a Corporate Management.
2. People from Society do not influence the Corporate Identity but add
mass to it, by their presence in each block of 5 KPIs.
3. Profits, Policies and Value System averaged together form the
optimum Rating of 5 as Intangible Value Capital.
4. Pension Funds of USD20.1 trillion built by individual's contribution of 40
years savings would necessarily sway the Fund Managers to invest in
corporate equity in the market on companies with a rating of 4 above of
Intangible Value Capital, in order to improve from the current negative
return of -3.
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16. 4. Knowledge Management Process Areas:
Financial Accounting, Management
i. Return on Intangible Accounting, Human Resources,
Manufacturing, Supply Chain
Management, Project Management,
Marketing, Data Services
1. Integrate Profits to Policies and Value System, measuring EPS,
Management Quality, Accounting quality, Risk Management and
Corporate Governance.
2. Relate each process area to Resource Team of 5 KPIs in a single block.
i.e. each goal is shared by 5 member team.
3. RoI - by each block, by i. Resource Area and ii. Process Area
4. Relate Valuation and Compensation by mass added to each block.
Resource Team Intangible Value Capital
1. People
2. Managerial
3. Technology
KPIs
Creative Process Action Process
4. Operational Intellectual Value Capital Emotional Value Capital
5. Finance Measuring Policies & + Measuring adherence to /2
Value System Policies & Value System
16

17. 4. Knowledge Management
ii. Occupy Wall Street
1.RoI - Return on Intangible - by Subject - Object distinction brings home
where energy is created.
2. People Participation - Balance Sheet data provided to the public
encourages insider trading and hides toxic assets. Intangible Value
Capital brings in People Participation by recognising in each block the
importance of People as the numero uno of investment in Corporate
Equity, directly as well as through Pension Funds.
3. Public Reporting: Higher RoI companies will take the place in Wall
Street pushing the lesser mortals however big they are now. Intellectual
Value Capital Rating will dominate, assuring sustainability of business
growth and profits.
4. 3 Ps - Policies, Profits, People will move forward, together.
5. Occupy Wall Street: With Pension Funds looking at Intellectual Value
Capital at optimised rating of 5, companies with Intangible Value Capital
rated 4 & 5 shall inevitably, Occupy Wall Street.
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18. Thank You
All the rating agencies have uniformly declared: “A rating, very simply
put, is an opinion -- an independent opinion”.[Ref.3] Similarly
accounting firms have opined: “ It is management‘s responsibility, with
the oversight of those charged with Governance, to ensure that the
entity‘s operations are conducted in accordance with laws and
regulations.” [Ref.4]
Pension Funds who reconsider their alternative investments (hedge
funds, private equity, commodities, etc.) should add selected 4 & 5
rated companies of Intangible Value Capital, for Market revival.
Corporates are sure to gain by Return on Intangible that should infuse
public confidence. As a corollary of their products. As a benefit a long
list of confident customers. Advertise high ratings.
To reorganise - write to: IBCM© Research
Jayaraman Rajah Iyer, jayar.ibcm@gmail.com
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19. Reference
Ref. 1: Accounting for brands in ED50 of IASC [Intangible Assets] compared with French and German practices –
An illustration of the difficulty of International harmonization.; For Presentation at the 19th Annual Congress of
the European Accounting Association Bergen, Norway, May 2-4, 1996; Dr. HerveL Stolowy and Dr. Axel Haller
page 7
Ref. 2: “Global Competition and Collaboration” New Building Blocks for Jobs and Economic Growth: [Conference
sponsored by OECD, Athena Alliance, Kauffman, The Conference Board, McDonough School of Business
Georgetown University and the National Academics] 4.16 Page 5
Ref. 3: CRISIL's Roopa Kudva: 'It Is Very Important for Rating Agencies to Be Transparent, Published: June 02,
2011 in India Knowledge@Wharton, http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4613
Ref. 4: Review of the OECD antibribery instruments: compilation of responses to consultation paper: 31 March
2008, Deloitte Touche Tohmatsu
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