Summary

  • The financial statements of publicly traded companies disclose at least four materially different outcomes for IPv4 portfolios: intangible assets with zero acquisition cost generating gains on disposal; operational intangible assets separated from inventories held for sale; acquired intangible assets with indefinite useful lives; and acquired intangible assets with definite useful lives amortised over 17.5 years.
  • These outcomes represent neither a global error rate nor a single correct classification. They arise from acquisition history, intended use, applicable accounting standards, assessment of useful life and, above all, different evidence about what the holder actually controls.
  • A registry entry is an important piece of evidence but not a complete accounting finding. The entry alone proves neither legal ownership, unrestricted transferability, routing capability, a reliable useful life, an active market nor the cash flows attributable to a specific block.
  • The accounting question should be framed as a bundle of rights and dependencies: Who is recognised, which prefixes are covered, under what agreement, with what transfer conditions, for what use and with what operational services and third-party restrictions.
  • The Number Resource Society can facilitate the audit of this bundle through portable, time-stamped and independently verifiable registration facts. It should not prescribe whether an address portfolio should be recognised as inventory, intangible asset, indefinite useful life, impaired or off the balance sheet.

Scarcity created value before accounting created a terminology

The modern IPv4 market began with a fairly simple transaction that even made the newspapers. In 2011, as part of Nortel's bankruptcy, Microsoft agreed to pay approximately $7.5 million for 666,624 legacy IPv4 numbers. The price made scarcity tangible. Addresses that had previously been administratively allocated were now traded for money in a court-supervised auction.

The accounting consequences were less straightforward. What had Nortel sold? A set of numbers cannot be owned like a warehouse. The ability to announce routes is not exclusive in a physical sense: another network can announce the same prefix, even if the result is more a conflict or hijack than legitimate use. The registration is important, but the registry in question did not describe the numbers as freely held property. The buyer also needed a relationship with registry services and a recognised transfer. The economic asset was therefore a combination of registration, contractual status, practical control, scarcity and market acceptance.

This combination has become more valuable and more diverse since 2011. Companies use addresses in their own networks. They transfer surplus blocks. They lease address capacity to customers. They acquire portfolios in business combinations. They place certain portfolios in special financing structures. Each activity can lead to a different unit of account and a different cash flow pattern, even when the visible identifier is an IPv4 prefix.

The result is a balance sheet asset without an established common name. Public reports use terms such as IPv4 addresses, IP addresses, address usage rights, IPv4 address assets and internet number resources. Registry documents speak of allocations, assignments, registrations, licences, registration rights and holder status. Lawyers might describe a bundle of contractual rights. Network engineers might speak as if the block itself were controlled. Markets quote a price per address and compress all these distinctions into a single denominator.

None of these terms is entirely wrong. None is sufficient for all purposes. Accounting inconsistency begins where a convenient name conceals the composition of the right.

Four reports, four seemingly defensible answers

The clearest evidence is not a theoretical debate but the decisions that companies have already disclosed.

RM plc announced in October 2023 that it had sold a further portion of its IPv4 addresses for $2.2 million in cash. It stated that the addresses were classified as intangible assets and had been acquired at nil value. This sentence captures one of the defining accounting effects of historical allocation. A resource can have a carrying amount of zero and a significant selling price. Recognition at nil value does not mean an absence of economic value; it can mean that the company incurred no acquisition cost that would have become a recognised carrying amount.

Tessellis Group's 2023 annual financial report drew a different dividing line within an acquired portfolio. In the purchase price allocation, 524,000 addresses described as essential for business operations were classified as other intangible assets and measured at €18 million at the acquisition date. A further 762,000 addresses not immediately required for ordinary operations were classified as inventories held for sale and measured at €26.2 million. The identifiers belonged to the same technical class, but management-defined purpose separated the balance-sheet categories.

Cogent Communications recognised $458 million for acquired IPv4 addresses following its acquisition of Sprint's wireline business. Its public reports describe the portfolio as an intangible asset with an indefinite useful life that is not amortised. Valuation used market information, and the conclusion of an indefinite useful life means that management identified no foreseeable limit on the period over which the asset is expected to generate cash flows. This does not mean that the addresses are immortal, legally unconditional or immune from impairment.

Uniti Group reported another acquired portfolio as an intangible asset with a definite useful life amortised on a straight-line basis over 17.5 years. Its 2025 report also showed that some unused addresses with a net carrying amount of $6.7 million were sold for $5 million. Here the portfolio had a declining balance-sheet life, a carrying amount and a disposal result below that amount.

These examples are not a statistical sample of all holders. They do not permit determination of the frequency of each treatment. Private companies disclose less; many operators never identify addresses separately; accounting requirements and transaction-specific facts differ. But these examples suffice to refute the notion that practice has converged on a single, obvious classification.

The balance sheet remembers how the right was acquired

Two companies may control similar address blocks at the balance sheet date and yet report radically different carrying amounts because accounting preserves the memory of acquisition history.

A company that received addresses decades ago may have paid registration fees and network costs but no separately identifiable purchase price. Those expenditures may have been expensed as incurred, included in broader operating costs or linked to a service contract rather than capitalised as the cost of a separate asset. The portfolio may therefore continue to be absent or stated at a nominal amount even when a secondary market demonstrates significant exchange value.

A company that buys the same quantity in an isolated transaction has directly observable cost. Subject to applicable recognition rules, the purchase facilitates identification and measurement. The transaction itself is evidence that the right can be separated and exchanged. Legal, brokerage and transfer costs may also be attributable. The acquired asset is recognised even if an economically similar historical portfolio is not.

A business combination creates another path. Acquisition accounting requires the acquirer to identify and measure the acquired assets at the acquisition date. A portfolio that was not recognised in the seller's financial statements may become a separate intangible asset for the buyer. The addresses acquired by Cogent are an example of significant fair-value recognition from a larger acquisition, not from the seller's previous carrying amount.

Inventories introduce the concept of intended use. When a company acquires or holds addresses intended for sale in the ordinary course of business, the portfolio may need to be analysed differently from addresses used to provide connectivity. Tessellis's split makes the distinction particularly visible: operational need justified classification as an intangible asset for one part, while the sale purpose justified classification as inventory for the other.

The balance sheet therefore does not provide an inventory of economic wealth in IPv4. It records rights recognised under particular standards, histories and purposes. The sum of values reported by some entities would not produce a meaningful global market capitalisation. The denominator of all controlled, transferable or economically usable addresses is not available, and the historical, unrecognised base may be significant but cannot reasonably be valued by applying a single public transaction price to every address.

IAS 38 asks a question of control, not a question of terminology

IAS 38 defines an intangible asset as a non-monetary, identifiable asset without physical substance. Identifiability can arise from the asset being separable or resulting from contractual or other legal rights. Recognition also requires probable future economic benefits and reliable measurement of cost. Control means that the entity can obtain the benefits and restrict the access of others to them.

IPv4 rights can fit into this architecture, but it depends on the facts.

Separability is supported if a portfolio can be transferred independently or together with a related agreement. An actual market transaction is strong evidence. However, separability is not uniform for all prefixes. Historical resources may have different contractual histories. Provider-dependent allocations may not be portable. A transfer freeze may exist. A registry may require the recipient to satisfy certain conditions. More specific entries may complicate division. The fact that one block was sold does not prove that every entry can be sold in the same way.

Contractual rights can also support identifiability. ARIN's current Registration Services Agreement explicitly refers to registration rights in the included number resources and grants a defined set of service-related rights. APNIC describes delegated resources under a usage licence according to its documents. RIPE NCC's agreements and policies describe the relationships between registration, allocation, assignment and transfer. These instruments give substance, but there is no uniform global instrument.

Control is equally fact-dependent. A holder may be recognised in a registry, maintain route origin authorisations, operate reverse DNS, control credentials and exclude legitimate counterparties from using the entry. This constitutes actual control. It is nonetheless different from the physical exclusivity associated with real property. Routing can be contested. Registry services can be suspended. A contract can be terminated. A court or administrator can change authority. The accounting conclusion should reflect the enforceable and operational bundle, not a metaphysical argument about whether numbers can be owned.

Future benefits may come from service revenue, avoided address acquisition costs, customer retention, lease income or disposal proceeds. Each pattern implies a different unit of account and different impairment indicators. An entity should not rely on scarcity alone when it cannot link the portfolio to benefits it can obtain and defend.

Registry terminology is part of the evidence and part of the problem

The language of the RIRs is deliberately careful because the registries coordinate unique identifiers for a shared network. In 2022 ARIN stated that internet number resources represent a set of contractual rights arising when the resources are issued, while insisting that they are not freely held property. Its current policy states that resources are not sold under ARIN's administration and that transfers require express written approval under policy. At the same time, its agreement and fee schedule use the practical language of transfer of registration rights.

APNIC's current policy documents state that treating internet number resources as perpetual property runs counter to the objectives of the system. They describe a licence subject to membership and policy conditions. RIPE NCC's transfer policy refers to a legitimate resource holder and requires transfers to be reflected in the RIPE Database; completion occurs when the entries are updated.

These are not superficial differences. They affect the available evidence for identifiability, control, useful life and disposal.

A right described as a revocable licence can still be an accounting asset. Many licences are. A contractual restriction can leave a separable right in place if transfers subject to consent are common. The absence of perpetual property does not automatically preclude recognition. Conversely, a market price does not eliminate the contractual conditions. Accounting should neither accept the registry's anti-property language as an instruction to recognise nothing nor convert transfer practice into absolute ownership.

The institutional difficulty is that terminology varies by region and resource history. “Legacy” may describe an allocation made before the relevant RIR existed but says nothing about the current contract. “Holder” may identify the entity in a database without describing all legal interests. “Transfer” may refer to a commercial sale, a merger, a name change, a registry update or a movement between service regions. “Address asset” may include registrations, customer leases, receivables and associated operating rights.

An auditor cannot resolve these differences by choosing the strongest noun. The answer requires the underlying documents and the current state.

Intangible asset is only a beginning, not a complete classification

Labelling IPv4 rights as an intangible asset may be generally correct but leaves the most important questions unanswered.

What is the unit of account? A /16 may be held as a single operational block but sold in smaller prefixes. A portfolio may contain blocks under different agreements, with different routing reputations and transfer histories. A company may control one registry account while its subsidiaries operate individual networks. Treating each address as a fungible unit can mask legal and operational constraints that exist at the prefix or contract level.

What is included in cost? A single buyer may pay a seller, a broker, legal advisors and registry fees. It may incur remediation costs to make a block usable because routing history or abuse reputation limits its acceptance. Some of these expenditures may be directly attributable; others may be operating expenses. A market quotation per address cannot answer this breakdown.

What benefits does the asset support? Addresses used within a broadband network may contribute to a cash-generating unit, not independent revenue. A leased portfolio may generate identifiable contractual cash flows. Addresses held for sale may be measured based on expected sale proceeds. A single classification for these three uses can obscure the evidence needed for impairment testing.

What is the residual value? An asset with a definite useful life may retain a selling value after its operational use. This value depends on transferability, block size, reputation, registration status and future substitution by IPv6. It cannot be derived from a quoted price without risk.

What information is material? A significant recognised portfolio may expose investors to valuation assumptions, transfer restrictions, concentration on a single registry relationship and fluctuations in market liquidity. An unrecognised historical portfolio may create future disposal gains that complicate operating comparability. The label “other intangible assets” can be technically permissible but economically uninformative if the amount or disposal is significant.

The useful accounting debate begins after the label, not before.

Inventory depends on business purpose, not the speed of a sale

Tessellis's classification of certain acquired addresses as inventory raises a particularly important distinction. Inventory is not simply an intangible asset that management hopes to sell. It typically reflects an asset held for sale in the ordinary course of business, in the process of production for such sale, or consumed as materials or supplies. The purchase price allocation disclosed by the company linked this classification to addresses that were not immediately required for ordinary operations and were available for disposal.

This fact pattern should not become a universal rule. A telecommunications operator that disposes of a surplus one-off does not automatically become an address trader. An asset can remain intangible even when sold. Classification depends on the company's business model and the portfolio's role, not on whether management finds a buyer.

The distinction matters because valuation and presentation differ. Inventory under IFRS is generally subject to a lower of cost and net realisable value analysis. An intangible asset with a definite useful life is amortised and tested for impairment when indicators arise. An intangible asset with an indefinite useful life is not amortised but is tested for impairment regularly. Assets meeting the held-for-sale classification criteria under another standard may have a different presentation. The presentation of revenue and gains may also differ depending on whether address sales constitute ordinary revenue or disposals of long-term assets.

Public evidence does not show how many companies hold addresses as inventory, how many are ordinary traders or how consistently auditors apply the boundary. There is no reliable global denominator. The split disclosed by an Italian group shows that purpose can divide a portfolio; it does not establish an industry convention.

For governance, the lesson is that registry data should not encode an accounting category. A registry can record that a block is registered in an entity's name, subject to an agreement, transferable under certain conditions and currently associated with specific operational services. It generally cannot know whether management holds that block for internal use, for lease to customers, as a strategic reserve or for sale in the ordinary course. Requiring the registry to flag “inventory” would put incomplete administrative knowledge in place of the reporting entity's business facts.

Indefinite useful life does not mean permanent

The contrast between Cogent and Uniti is most striking with respect to useful life. One publicly traded company treats acquired IPv4 addresses as having an indefinite useful life; another amortises them over 17.5 years.

An indefinite useful life is an accounting judgement that no foreseeable limit has been identified on the period over which the asset is expected to generate net cash flows. It is not a claim of perpetual legal ownership. The asset remains subject to annual impairment testing and reassessment of whether the indefinite classification continues to be supportable. A change in technology, policy, market depth, routing practice or legal enforceability could shorten the expected period.

A definite useful life likewise does not predict when the last IPv4 packet will be transmitted. Management may estimate the period over which the acquired portfolio contributes to the specific business, taking into account expected IPv6 migration, customer contracts, network strategy, regulatory conditions and disposal plans. Straight-line amortisation is a cost allocation; it is not a physical scrapping curve.

Both judgements can be reasonable in different fact patterns. A lessor with recurring address revenue, active market evidence and no contractual termination date may see no foreseeable limit. An integrated operator may expect a specific transition or align the asset with a forecast period supported by the acquisition valuation. Differences among IFRS adopters in this area can therefore lead to different conclusions without either necessarily misapplying the standard.

The difference should, however, be visible and verifiable. If an address portfolio is material, investors should understand why its useful life is definite or indefinite, what factors could change the estimate, how market prices were used and how registration conditions feed into the analysis. A generic label of “other intangible assets” does not convey this sensitivity.

The registry's contribution here too is factual. It can verify whether the registration has a fixed contract term, renewal conditions, transfer freezes, policy dependencies or known service interruptions. It should not translate these facts into a 17.5-year useful life. Useful life belongs to the cash-flow context of the entity, not to the database administrator.

Market price is observable but the asset is not homogeneous

IPv4 markets tempt analysts to multiply a quoted price by an address count. This arithmetic is useful for a rough scenario and dangerous as an accounting conclusion.

Block size affects marketability. A large aggregate may serve a significant network and preserve routing efficiency but reduces the buyer pool and may need to be divided. Small prefixes can be sold to more buyers but incur higher transaction and management costs per address. Regional suitability and inter-RIR compatibility matter. Transfer freezes matter. Legacy status and contractual coverage matter.

Reputation counts too. Addresses associated with spam, fraud or prior abuse may incur filtering and remediation costs. Registry accuracy, reverse DNS readiness and routing security controls affect deployment. A clean registration with complete corporate records is economically not identical to a contested block whose historical holder no longer exists.

Use restrictions are important. An operator may derive value from avoiding large-scale network address translation, preserving customer configurations, supporting legacy software or serving customers who need public addresses. A lessor evaluates expected lease cash flows and occupancy. A trader evaluates liquidity upon sale. A distressed seller may accept a price that does not represent normal market conditions.

Observable transfers therefore provide important but incomplete evidence. Cogent's valuation documentation referred to a market approach using recent transactions. This is a reasonable starting point for an asset with market activity. It nonetheless requires adjustments for the characteristics and highest-and-best-use of the specific portfolio. Tessellis's separate operating and selling groups show why a single average price can obscure purpose. Uniit's sale below carrying amount shows that a recognised individual value does not guarantee realisability upon sale.

None of the public sources used here provides a complete set of global transactions with consistent terms, block quality, rights, fees and failed deals. Published transfer lists show approved changes, not necessarily prices. Broker indices may omit private terms and aborted offers. The article therefore does not estimate a global average price, an aggregate unrecognised value or a frequency of impairment.

Impairment begins where registry facts and business facts diverge

An IPv4 portfolio can lose recoverable value without disappearing from the registry. This is why impairment analysis needs more than the current holder's name.

An operational portfolio may be exposed to technological substitution. Faster IPv6 adoption in the company's customer base may reduce the avoided-cost advantage of IPv4. Network re-engineering may leave blocks unused. Customer churn may reduce demand. A change in abuse reputation may make deployment more expensive even when the registration remains correct.

A portfolio held for sale may suffer from deteriorating liquidity, transfer restrictions, fragmentation costs or a narrower buyer pool. A lease portfolio may suffer from declining occupancy, customer concentration, defaults, price pressure or enforcement difficulties. A contested ownership chain may increase time and legal costs. Loss of registry credentials or a policy violation may weaken practical control.

Positive evidence counts too. Sustained lease income, successful transfers of comparable clean blocks, stable registration rights and continued operational need can support value. A temporary decline in quoted prices does not automatically extinguish a long-term benefit. Conversely, scarcity rhetoric does not heal a portfolio that cannot be legally or operationally deployed.

The impairment unit should follow how cash flows are generated. Addresses embedded in a network may not generate independent cash flows and may be tested with a larger group of assets or a cash-generating unit. A separately leased portfolio may justify a narrower test. Blocks held for sale may have directly observable disposal evidence. Management should reconcile the prefix population used for valuation with the authoritative registration status so that duplicate, non-entitled or operationally encumbered space is not double-counted.

Auditors need evidence of change. Which prefixes moved during the year? Which were subdivided? Which were subject to a freeze or legal dispute? Which were leased? Which generated revenue? Which are still operationally required? A year-end registry snapshot cannot answer movement. A signed history can.

The evidence problem for the auditor goes beyond ownership

External auditors are not asked merely to confirm that an address range exists. For a material balance, they need evidence of existence, rights and obligations, valuation, classification, completeness, presentation and disclosure.

Existence means that the exact prefixes can be reconciled to the current registration and internal records. The list must eliminate double-counting between parent and subsidiary, between operational and sales portfolios or between lessor and lessee. More specific allocations must be understood and not treated as additional addresses.

Rights and obligations require the applicable registry agreement, transfer chain, legal entity name, service status, encumbrances or contractual restrictions known to the company, customer leases and any litigation. A WHOIS entry can confirm the current registration but may not provide the full chain or the reporting entity's economic interest.

Completeness goes both ways. The company may omit historically allocated blocks because no capitalisation record exists. It may also overestimate control by counting space used by customers, subsidiaries or counterparties under arrangements that restrict sale. Network configuration, registry entries, RPKI status, contracts and billing systems may each show a different population.

Valuation requires transaction data or cash flow assumptions tailored to the blocks' characteristics. Management must distinguish observable approved transfers from offer prices. It must consider fees, brokerage costs, taxes, reputational remediation, legal due diligence and expected sale duration. Lease valuations should not treat contractual revenue as risk-free simply because addresses remain scarce.

Classification requires evidence of business purpose. Board resolutions, sales programmes, ordinary course of business, network forecasts and commitments to customers can determine whether a portfolio is operationally used, leased, held for sale or part of a disposal group. A registry cannot provide this evidence.

Presentation and disclosure require assessment of materiality. A company with a carrying amount of zero may still need to explain a significant disposal gain. A company with a significant indefinite-life balance may need to disclose material judgements in valuation and useful life. The audit opinion does not standardise the underlying label; it tests whether the financial statements apply the chosen framework properly to the facts evidenced.

A minimum legal status would enable comparisons

Companies should describe the asset before they value it. A minimum legal status can do this without pretending that every legal system has arrived at the same concept of ownership.

The status should identify the reporting entity and any registration entity. It should list the exact prefixes, the number of addresses without double-counting more specifics, the registry concerned, the resource history, the type of agreement and effective dates. It should state whether the resource is historical, allocated, assigned, transferred or otherwise registered, using the actual terminology of the institution.

It should then identify the economically relevant rights: use, maintain registration, apply for transfers, subdivide, lease or assign to customers if permitted, reverse DNS, RPKI and contact management. Each right should be linked to its condition and not described as absolute.

Restrictions must be listed alongside rights. These include transfer freezes, membership obligations, payment conditions, policy compliance, ongoing litigation, legal limitations, customer commitments, route origin dependencies and any contractual consents. The status should separate a transfer restriction from a usage restriction and from a practical routing obstacle.

Finally, the status should record purpose and accounting treatment. Is the prefix used in network, leased, reserved, actively marketed, contractually committed or intended for surrender? Is it separately recognised, included in goodwill, included in inventory, included in another asset group or unrecognised? What useful life, what amortisation and what impairment approach apply?

This status would not be a new accounting standard. It would be a factual bridge between engineering, legal, treasury and financial reporting. It would help an audit committee understand why two blocks with the same number of addresses may not have the same rights or the same value. It would also reveal cases where management's classification rests on a claim that the registry cannot support.

The status should remain confidential if contracts or security controls require. Public disclosure can summarise material facts without publishing credentials, customer identities or sensitive transaction terms.

What a registration service can verify

A qualified registration service can reduce the costliest ambiguities without becoming an accountant.

It can verifyidentity: the currently recognised legal entity, the evidence used for succession and the date a name or control change became effective.

It can verifyscope: the exact prefixes covered, their parent-child relationships, whether the registration is current or superseded and whether the same addresses appear in conflicting current states.

It can verifycontractual basis: the agreement under which services are provided, the version and effective date, whether it is active and what published policy conditions apply.

It can verifytransfer status: whether a transfer is in principle permitted, blocked, pending, completed, rejected or subject to a registered restriction; what parties were involved; and the relevant completion date.

It can verifyservice controls: who is authorised to manage registration contacts, reverse DNS and routing security entries, without disclosing secret credentials.

It can verifyhistory: previous recognised holders, subdivisions, consolidations, transfers and corrections through additive recording rather than an overwritten, unexplained snapshot.

It can verifycertification quality: who signed, what class of evidence was checked, when the certificate expires and whether a later event has superseded it.

These facts would significantly improve audits. They would not evidence expected cash flows, selling prices, inventory purposes, useful lives, impairments, tax bases or legal priorities among creditors. A registry should name this boundary clearly. Its credibility depends on refusing to certify conclusions it is institutionally unable to formulate.

What the registry should not decide

The desire for comparability can easily morph into a demand that the registry prescribe the accounting treatment. That would be a category error.

The registry should not state that every IPv4 registration is property. Ownership status may depend on jurisdiction, contract, resource history and the precise legal question. Nor should it state that no registration can be an asset. Accounting standards recognise many conditional contractual and licence rights.

It should not assign useful lives. A service relationship may have no fixed end while the economic use by the entity is limited. The registry can state the contract term and policy conditions; management and auditors assess the cash flow horizon.

It should not publish fair values. Registry transfer data typically lack full information on prices, terms and failed transactions. A unit price sponsored by a registry would acquire false authority and could distort fees, negotiations, tax analyses and impairments.

It should not flag inventory. This classification depends on ordinary business purpose and management-defined intention. The same block can be operational infrastructure in one entity and trading inventory in another.

It should not certify legal ownership free of claims. It can state the current registration and recorded restrictions. Unknown claims, insolvency priorities and judicial jurisdictions belong to the competent legal proceedings.

It should not allow an audit inquiry to disclose confidential dealings. Public verification can confirm a signed status without publishing customer assignments, private contracts or security arrangements.

Most importantly, it should not make accounting treatment a condition of registration. A company using a different compliant classification should not lose eligibility for services or transfers. Administrative power over the registry must not become power over financial reporting.

The appropriate maxim for the registry is simple: Make the facts reliable enough for others to draw conclusions, and make the boundaries of those facts impossible to overlook.

The NRS can turn portability into audit evidence

The positive contribution of the Number Resource Society is not a universal chart of accounts. It is a more portable and verifiable layer of evidence around registration rights.

Portability matters because control is weaker when the proof of control depends entirely on a single service provider that the holder cannot leave. If a registry can withhold registrations, delay a transfer or disappear, the right claimed by the entity contains an institutional dependency that auditors and valuers must consider. A qualified reception service capable of verifying and continuing the registration under common rules reduces that dependency.

An NRS-compliant certificate could identify the holder, prefixes, applicable service agreement, current service, recognised transfer conditions, active alerts and a signed history. It could be verified by an auditor at the balance sheet date and reproduced later. If the holder changes service, the evidence history would follow the registration rather than being reset.

This design would improve testing of existence and rights. It would also make subsequent events clearer. A transfer after the balance sheet date could be linked to the condition at the previous balance sheet date. A subdivision could be exactly matched. A dispute alert could show whether it existed before management completed a valuation. An expired freeze would not remain as an undocumented oral assurance.

The NRS should be evidence-bound. Its certificate should avoid terms such as freehold, unencumbered, fair value and indefinite unless it cites a specific legal or accounting document and identifies the speaker. The core statements should be administrative and reproducible: recognised, registered, active, superseded, transferable under stated conditions, restricted by an identified instrument or under review.

Competition among registration services can also improve data quality if each provider must export the same minimum facts and maintain an authoritative current state. A company should not obtain a stronger accounting asset simply because its registry uses more exclusive language. It should obtain better evidence because the service can prove what happened.

This is a limited but important role. Better registration evidence will not eliminate accounting judgement. It will ensure that judgement starts from the same verifiable facts.

Disclosure should reconcile value without inventing a global total

Material holders can improve financial communication with a small set of information.

First, state the nature of the recognised interest. “IPv4 addresses” can be concise, but the note should explain whether the balance represents acquired registration and usage rights, a portfolio held for sale, revenue-generating lease assets or a combination.

Second, state the acquisition history. Readers should know whether the portfolio was purchased separately, acquired in a business combination, historically allocated at low or no capitalised cost or reclassified from another use. This explains why the carrying amount may differ from apparent market value.

Third, state the accounting useful life and method. For a definite-life balance, disclose the duration, amortisation method and key assumptions. For an indefinite-life balance, explain why no foreseeable limit was identified and what events could change that conclusion.

Fourth, state the valuation basis and sensitivity when material. The market approach should identify the relevant transaction characteristics and adjustments without revealing confidential transaction terms. The income approach should explain assumptions about usage, price, churn, costs and terminal value. A hybrid approach should reconcile its components.

Fifth, state material dependencies on registries and transfers. This does not require reproducing contracts. It should explain whether maintaining registration, policy compliance, service status or transfer approval is necessary for value realisation.

Sixth, reconcile movements: acquisitions, subdivisions that do not change the total count, transfers, sales, impairments, amortisation and reclassifications. The number of addresses can supplement the money movement if defined consistently.

Seventh, distinguish recognised value from unrecognised potential. A company should not value historical addresses at an unsupported market sum. It can explain that some portfolios have no significant carrying amount and that disposals may generate gains.

Such disclosure would improve comparability while respecting the denominators that are not available. It would not pretend to know how many IPv4 addresses are controlled by reporting entities worldwide, what proportion is recognised or what proportion is for sale. Those totals are not evidenced by the selected public records.

Audit committees should ask where accounting judgement can fail

The audit committee's task is not the choice of a fashionable label. It is the identification of assumptions that could make a material balance or profit misleading.

For existence: Can the company reconcile every prefix counted to an authoritative current registration and exclude overlaps? Were sold, returned or transferred blocks removed in a timely manner?

For rights: Which legal entity is recognised? Which agreement and policy apply? Is management relying on a database contact that no longer has authority in the entity? Are historical resources treated differently from contractual ones?

For control: Can the company maintain registration, routing security authority and operational entries? Can it prevent unauthorised disposal? Does another party hold credentials or a contractual veto?

For classification: What evidence supports sale in the ordinary course, operational use, leasing or strategic reserve? Has the purpose changed? Is reclassification timely rather than chosen to improve a metric?

For useful life: What event would lead to a revision of the definite useful life or a challenge to the indefinite classification? How does the forecast address IPv6 adoption, customer demand, policy changes and market liquidity? Is the horizon consistent with the business plan used elsewhere?

For valuation: Are comparable transfers truly comparable? Are failed sales, broker fees, reputation, block size and sale duration considered? Are lease cash flows double-counted, both in the address value and in the customer relationship value?

For impairment: What operational or market indicators are monitored? Has a sale below carrying amount provided information about the remaining portfolio? Was a registry dispute or transfer freeze treated as a legal indication despite affecting impairment?

For disclosures: Would an investor understand why a portfolio with nil acquisition cost has generated a large gain, or why one company amortises a seemingly similar asset while this one does not?

These questions turn a naming argument into governance. They also show why better registration evidence is valuable without being decisive.

Standard-setters should resist both silence and premature uniformity

Public evidence argues for clearer practice, not a one-line universal solution.

Silence has costs. Material IPv4 balances may hide in other intangible assets. Historical portfolios may produce gains that resemble recurring operating performance. Different useful-life judgements may impair earnings comparability. Presentation as inventory or long-term asset can change margins. Investors may not know whether value depends on a registry contract, customer leases or an assumed resale market.

Premature uniformity has other costs. Requiring every portfolio to be an intangible asset with indefinite useful life would ignore ordinary traders and limited-economic-life forecasts. Amortisation over a single standard period would invent a global technology transition date. Treating all historical allocations as fair-valued assets would violate recognition and measurement principles and rely on a market denominator that does not exist. Treating no address rights as an asset would ignore separability, contracts, cash flows and actual transactions.

A more useful regulatory response would focus on disclosure and decision factors. When material, entities could be required to explain the nature of the right, acquisition method, intended use, dependencies on registries, useful-life judgement, valuation method and movements in count and carrying amount. Examples could distinguish between operational rights, trading inventory, lease portfolios and recognition in a business combination, without pretending that every situation has only one answer.

Auditors and regulators can also challenge standardised language. If management labels a portfolio as indefinite-life, it must identify the evidence. If it uses a market approach, it must explain comparability. If it reports a gain from a nil-cost sale, it must prevent readers from treating that gain as evidence of recurring margin without context.

The goal is disciplined variation. Different answers should result from different facts, not from different degrees of disclosure.

Accounting inconsistency is a map of institutional uncertainty

IPv4 accounting appears inconsistent because the underlying institution distributes several things at once: a unique number, a registry registration, a contractual relationship, operational control, policy commitments and access to a transfer process. Markets then add pricing, leasing and financing. Courts and insolvency proceedings add claims on the disposal. No single institution defines the complete bundle.

Public reports show the consequences. RM could sell intangible assets at nil cost. Tessellis could split acquired addresses into operational intangible assets and inventories. Cogent could recognise an indefinite-life asset. Uniti could amortise a definite-life asset and sell part below carrying amount. Each report reveals a different combination of history, purpose and rights.

It would be comforting to pick one treatment and label the others anomalies. The evidence does not support that conclusion. It also does not support the assertion that all companies disclose adequately. The correct diagnosis is narrower: economically significant IPv4 interests are accounted for under general standards without a standardised factual description of the right.

The NRS can help by standardising that description. A portable registration can prove who is recognised, what is covered, what agreement governs, what has changed, what conditions persist and when a transfer became effective. The registration can survive a change of service provider and document disputes without silently altering the history.

The institution should stop there. It should not tell Cogent whether an asset has an indefinite useful life, Tessellis whether a portfolio is inventory, Uniti what amortisation period to use, or RM how to report a disposal gain. These are conclusions about purpose, cash flows and applicable accounting standards.

The sustainable division of labour is therefore clear. Companies describe use and expected benefits. Auditors test recognition, measurement and disclosure. Standard-setters define accounting principles. Courts decide legal disputes. Registration services maintain verifiable facts. The NRS makes those facts sufficiently portable so that no established operator can monopolise the evidence.

An asset does not need a universal ownership label to be recognised. It needs an accurate description of the rights and dependencies that create value.

When that description is missing, the balance sheet fills the gap with inconsistent names.

When it is available, disagreement can become reasoned judgement, not institutional speculation.

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