Insights into the collateralisation of intangible and intellectual property assets by non-financial listed entities on the ASX/S&P 200

The article examines the collateralisation practices of the top 200 ASX/S&P listed entities. Key highlights of the current era include a resurgence of start-ups with intellectual property and other intangibles as their primary assets. Conventionally, lenders display a strong preference for tangible assets as security. Credit providers' preference for tangible assets for collateral, diminishes the funding options for many entities, especially start-ups, which have a limited asset pool they can pledge. This empirical study uses inductive qualitative content analysis to investigate the extent of disclosures of (1) assets pledged as security and (2) intellectual property in annual reports of the top 200 Australian-listed companies, and to (3) examine the use of intellectual property and intangible assets as collateral with credit transactions. Also examined is whether pitfalls continue to exist with the current intellectual property framework in Australia for companies wanting to collateralise their intangible assets. Results point to high levels of inconsistency in collateral reporting practices.