In the modern economy, the market values of the most successful companies are based primarily on the value of their intangible assets, which assume absolute dominance over tangible assets. There has been a dramatic increase in the share of intangible assets in the market value of the company (over 90%). The research paper focuses on the challenges of financial reporting in the field of recognition and measuring intangible assets as dominant determinants of value creation and competitive advantages of the company. In addition to analyzing the causes of differences in accounting treatment of purchased intangible assets and internally generated intangible assets, the paper outlined potential negative implications for reporting as a result of the existence of discretionary management rights in the field of measurement of purchased intangible assets, critically are analyzed the requirements of the new international regulation regarding measuring the fair value of non-financial assets, as well as elaborated limitations of the current model of financial reporting in the area of internally generated intangible assets.

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