Thanks to a Mumblr blog posting by an Indian management consultant, I recently read the Infosys annual report. Most of the report looks like the average annual report. But tucked in the back, they include what they call an “intangible assets score sheet.”

The score sheet (found on page 135) uses numerical proxies to try to get to the core of the three major categories of intangibles, including:

1. External structure – They focus exclusively on clients, using metrics such as growth in revenue, numbers of clients and revenue from repeat business.
2. Internal Structure – They focus on R&D, technology investment and efficiency. Efficiency is measures through sales and G&A expenses compared against staff and revenue levels
3. Competencies – They focus on staff levels, age of employees, attrition and value added for different kinds of employees.

This is an amazing start that begins to show make intangibles more tangible to the average analyst. Given the power of intangible information shown in the contest I described in a recent post on XBRL, companies need to learn how to “show” their intangible value to their stakeholders.

Some additional things that I would like to see in this kind of report:

• External – Metrics around key external relationships with suppliers and partners
• Internal – Metrics around internal process strength
• Competencies – Metrics around training expenses and recruiting costs

Infosys is not the first to do this. I will profile others in the future. Do you know of other cases of intangibles reporting to shareholders? Post a comment or send me an email and I will add them to future posts.