By various estimates, half—or more—of the market capitalization of the S&P 500 index represents the value of intangible assets, such as brands, customer data, and the like. As valuation experts know, under current U.S. accounting rules, most of this doesn’t show up on corporate balance sheets. That’s a problem, points out a recent Wall Street Journal article.

Ancient accounting: The absence of the value of intangibles prevents investors from properly gauging their risks, according to Baruch Lev, an accounting and finance professor at New York University’s Stern School of Business. “It’s an incredibly important issue,” he says. “Investment in intangibles is almost completely obscured from investors. It’s 19th-century accounting.”

The problem of how to value such intangible assets has “vexed accountants for decades.” And the FASB, while “considering” the issue for its agenda, "hasn’t been able to find a solution in which the benefits of reporting intangibles outweigh the costs." Some investors and market analysts say a company’s stock price reflects the value of intangibles, so it’s not necessary to break out their values. On its blog, the Gartner Group disagrees, saying that companies could compile a second set of books with the intangibles valued (using Gartner’s formulas and methods), share the data publicly, and see how the competition and financial markets respond.

Marketers vs. appraisers: Another issue is who is best to value marketing-related intangibles such as brand names? Should it be accountants and valuation experts or marketing pros? Accountants point to recent data that show that the average brand valuation by marketers is way off target, based on actual prices paid. But the valuators on the marketing side say the accredited valuation experts and financial professionals are too conservative.