Showing papers on "Intangible asset published in 2005"

Intangible Assets: Valuation and Economic Benefit

Abstract: Preface. Acknowledgments. CHAPTER 1: Introducing Intangibles. How This Book Is Organized. What Is Valuation Anyway? CHAPTER 2: History and Taxonomy. Types of Intangible Assets. Identifiable Intangibles. Unidentifiable Intangible Assets. Liabilities. What Is Not an Intangible Asset. Summary. Additional Resources. CHAPTER 3: Theory of and Research on Intangible Assets. Some Economic Characteristics of Intangibles. Growth in Intangible Assets. Researching the Value of Intangible Assets. Summary. CHAPTER 4: Accounting for Intangibles. Identifiable and Unidentifiable Intangible Assets. To Expense or Capitalize. Goodwill Paradox: Why Ever Pay More than Fair Value? Summary. CHAPTER 5: Portfolio of Intangible Economic Benefits (PIE--B). Proto--Assets. Introducing the PIE--B. Perspectives on the PIE--B. Summary. CHAPTER 6: Income Approach and Intangibles. Steps to the Income Approach. Present Value Formula. Estimating the Discounted Cash Flows. Soda Machine as Proto--Asset? Discussion. Income Approach and Intangibles. Options Model. Summary. Appendix to Chapter 6. CHAPTER 7: Market Approach and Intangibles. Introduction to the Market Approach. Some Features of the Market Approach. Elasticity: A Useful Economic Concept. Comparable Firms. Unidentifiable Intangibles and Comparables. Summary. Appendix: Sources for Comparables. CHAPTER 8: Cost Approach and Intangibles. Original Cost. Book Cost. Replacement Cost. Summary. CHAPTER 9: Intangible Assets and Litigation. Panduit Test. Market Definition. Georgia Pacific Factors. Trade Secret Framework. Famous Dilution. Summary. CHAPTER 10: Intangible Assets: Strategy and Securitization. Bowie Bonds. Identification. Dynamic Securitization. Extension. Off--Balance Sheet Intangibles. Insecurity--The Case of the Recording Industry. Summary. CHAPTER 11: Conclusion. Toward a Theory of Ephemeral Assets. Summary. Additional Resources. Notes. References. Index. About the Author.

Using an asset-based approach to identify drivers of sustainable rural growth and poverty reduction in Central America : a conceptual framework

Abstract: The asset-based approach considers links between households' productive, social, and locational assets; the policy, institutional, and risk context; household behavior as expressed in livelihood strategies; and well-being outcomes. For sustainable poverty reducing growth, it is critical to examine household asset portfolios and understand how assets interact with the context to influence the selection of livelihood strategies, which in turn determine well-being. Policy reforms can change the context and income-generating potential of assets. Investments can add new assets or increase the efficiency of existing household assets, and also improve households' risk management capacity to protect assets. After all is said and done, a household's asset portfolio will determine whether growth and poverty reduction can be achieved and sustained over time. The asset-based framework is amendable to different analytical techniques. Siegel suggests combining quantitative and qualitative spatial and household level analyses (and linked spatial and household level analyses) to deepen understanding of the complex relationships between assets, context, livelihood strategies, and well-being outcomes.

A framework of intangible valuation areas (FIVA): Aligning business strategy and intangible assets

Abstract: Purpose – This study investigates the adequacy of existing intangible asset models and defines and codifies common principal valuation drivers of intangible assets for use in enterprise balanced scorecard valuation practices of information technology (IT) firms.Design/methodology/approach – Existing intangible asset balance scorecard valuation models and value chain models are evaluated to extract their value components and align them with performance‐based activities of the business enterprise to define a common taxonomy of value drivers of intangible assets. Chief executive officers (CEOs), chief finance officers (CFOs) and “other executives” of IT firms validate the taxonomy.Findings – IT firms that use a standard and consistent taxonomy of intangible assets could increase its ability to identify and account for more intangible assets for measurement and valuation.Research limitations/implications – This study is limited to the Washington Metropolitan Area, is a single sector study (IT firms), the targ...

Your Second Life? Goodwill and the Performativity of Intellectual Property in Online Digital Gaming

Abstract: This article examines the performativity of intellectual property in digital gaming environments, with a focus on Massively Multi-Player Online Games (MMOGs). The analysis centers on the creation and management of goodwill, an intangible asset of considerable value to corporations based on affective bonds between consumers, corporations, and their commodities in the marketplace. Most critical analyses of intellectual property consider neither the centrality of goodwill to corporate management of their intellectual properties in digital environments, nor the significance of the legal conditions that structure activity in such contexts. We develop a theoretical framework based on cultures of circulation involving network sociality, circuits of interactivity and the extensibility of the computer/user interface. This enables us to better understand shifting relations of power and reciprocity between corporations and consumers in digital gaming contexts, where the division between player-consumption and player-production is increasingly blurred. Technological capacities for consumers to become producers of gaming content changes the terrain upon which conflicts between corporations and consumers about intellectual property are negotiated and enhances the value of goodwill. An examination of Linden Lab’s Second Life - one of the fastest growing MMOGs and the first to affirm players’ intellectual property rights in their digital creations - provides an illustration of both the limits and possibilities afforded by goodwill as a form of emerging governance in game worlds.

Intangible Assets and Firm Diversification

Abstract: The purpose of the paper is to re-examine internalisation and transaction cost theories of firm FDI. The methodology is based on cross sectional multivariate regressions and the Fama-French (1998) three factor event study procedure. In addition to the key explanatory variables we introduce and model several important control variables. We find evidence consistent with the internalisation and transaction cost hypotheses. Firms classified with internalisation advantages earn event period abnormal returns of 6.84 percent above firms that are classified without such advantages. In support of transaction cost theory we find that FDIs generate an average abnormal event period return of -2.36 percent. Further, in line with transaction cost theory we find firms classified with intangible asset advantages also tend to engage in the more complex forms of foreign and industrial diversification. A limitation of the study is we have not determined if the effect linked to the possession of intangible asset advantages is temporary or permanent. The study provides new and strengthened support for internalization theory and transactions cost theory.

A Strategy for Estimating Identified Intangible Asset Value: Hotel Affiliation Contribution

Abstract: While there appears to be general agreement that a large portion of a hotel’s total intangible asset (TIA) value is derived from its brand or franchise affiliation, the value contribution from franchise affiliation can vary widely despite relative uniformity in hotel franchise fees among similar brands. Therefore, using a hotel’s franchise fees as the sole basis for estimating a hotel’s intangible value may not always be the most appropriate technique for estimating intangible value. This article presents a strategy for estimating a hotel’s intangible value by comparing the market value of the total assets of the business (MVTAB) and value allocated to identified intangible assets due to the affiliation (IIA a ) of two affiliated hotels in the same central business district, valued as of the same date. Both properties are affiliated with internationally known hotel companies, and they are direct competitors with one another. Having isolated the analysis for time differences, location, and market dissimilarities, comparison can be made of IIA a , which, as previously noted, are largely attributable to brand affiliation for hotel properties. It should also be noted, however, that other identified intangible

Socio-Organizational Issues

Abstract: Whilst virtual organizations are enabled via existing and emerging technologies, they remain principally human constructs. The authors argue that the success of the VO throughout its lifecycle, from creation to dissolution, relies on its capability to create and sustain value. In this context, the human capital of the VO, and more generally, its ‘intangible assets’ play a determinant role. Thus the socio-organizational ‘equation’ consists of a combination of technology, culture, and organization, in which issues including trust, confidentiality, knowledge sharing, etc., must be blended successfully toward the shared VO purpose. This chapter explores the social and organizational aspects of virtual organizations and highlights important issues that need addressing in order to negotiate the necessary transition from a traditional to a knowledge driven organization that can engage effectively in knowledge driven alliances characterized by virtual business modes.

Packing and unpacking knowledge: Patents and intellectual capital

Abstract: Purpose – The purpose of this paper is to analyse how a patent is an intangible asset and how it creates value.Design/methodology/approach – Through analysis of a set of cases, the paper analyses how a patent becomes related to a series of other elements. This approach investigates the details of how a patent becomes useful. Theoretically, the paper suggests that a patent only creates value from being entangled in a web of resources in action, contrasting this with patents on hold where they are described as entities but not as resources.Findings – The paper shows that patens a valuable not by themselves (on hold) but by being linked to a series of other resources and purposes (in actions). To understand the value of the patent is to understand its relationships to other mechanism in production, marketing and finance.Research limitations/implications – The paper sets out an approach to study the value of patents which looks at the network around the patent. This is a limitation inasmuch as it is difficult...

The Transfer Pricing of Intangibles

Abstract: Transactions involving intellectual property play an increasingly significant role in economic activity at every level from global to local, with particular challenges for taxation and revenue authorities. Moreover, the manifold complexities associated with identifying, valuing and transferring intangibles make this an issue requiring a creative review of existing transfer pricing methodologies and techniques. In this ground-breaking new study, Michelle Markham offers an in-depth examination of attitudes at the forefront of this rapidly evolving area of taxation law, focusing her work on a comparative analysis of the US, OECD, and Australian perspectives on the transfer pricing of intangible assets. The Transfer Pricing of Intangibles not only highlights the current problems encountered in inter-affiliate transactions of intangible property, but also attempts to offer a variety of solutions to these problems. Among the issues explored are the following: how the tax treatment of intangible in the context of transfer pricing has become a major international tax concern; definitional issues which are vital to an understanding of transfer pricing; application of the arm's length principle to intangible asset transactions; determination of legal and economic ownership of group intangible assets; intangible asset valuation and transfer; transfer pricing methodologies; global formulary apportionment; transfer pricing documentation requirements; penalties for non-compliance; resolution of transfer pricing disputes; and, advance pricing agreements Revenue authorities, multinational enterprise executives, and tax practitioners around the world will greatly appreciate the recommendations and solutions proposed in this knowledgeable and thoughtful book. Its acute sense of the opportunities and pitfalls of an ever-more-complex area of economic activity place it in a category of its own, of inestimable benefit to interested parties.

Gradual Product Replacement, Intangible-Asset Prices and Schumpeterian Growth

Abstract: The paper develops a general-equilibrium model of scale-invariant Schumpeterian (R&D-based) growth. New higher-quality products are discovered through stochastic and sequential R&D races in each industry. The market share of an R&D race winner increases gradually and is governed by an exponential deterministic process. The introduction of gradual (as opposed to instantaneous) product replacement sheds more light on the effects of the rate of technology diffusion on long-run growth and on long-run dynamics of intangible asset prices. An economy with faster product diffusion rates experiences higher long-run innovation rates, faster transitional growth, and is populated by younger firms. As the typical firm becomes older, the earnings yield (i.e., the inverse of the price earnings (P/E) ratio) increases and expected earnings growth declines. Younger firms have lower earnings, lower market shares, but higher P/E ratios and higher expected earnings growth associated with their higher potential market growth.

El capital humano, otro activo de su empresa

Abstract: In an environment of competition, quick and permanent changes, a company’s survival depends on its capacity to build added value for clients and suppliers. This will become then, basis of competitiveness and market position, elements that at the same time depend on the ability to innovate, speed of response, adaptability to change and the ability to identify needs of all those who are part of the value chain the company. Human capital is an intangible asset, able to increase productivity, promote innovation and competitiveness. It is a very peculiar asset, different from any other. Human capital is a competitive advantage, companies should take care of, by identifying and enhancing people´s value for the company. Also, enterprises should increase their value for its people, so that it really works only with the best, and thereby reduces the risk of human capital transference.

Does Non-Inclusion of Intangible Asset Values Lead to Distortion of Financial Statements and Mislead Judicious Financial Decision Making? Focus on Environmental Accounting and Estimation of Knowledge Capital Values

Abstract: In a modem dynamic economy, because of technological, legal and regulatory uncertainties surrounding such environmental liabilities, long-term accrued liabilities are often difficult to determine and calculate combined with the fact that management of corporations embedded to 'natural capitalism' need to focus on intangible assets like intellectual knowledge capital. As ill-suited conventional accounting methodologies have failed to answer these crucial issues in a difficult and political risk-oriented economic climate, the challenges faced by corporations to tackle such problems and issues like delivering share-price performance (especially future value) with, for instance more than US$ seven trillion worth of the US stock market based on future value, the need for a better and new approach to financial statement analysis is more critical than ever.

Expert witness qualifications and selection

Abstract: Defines an expert witness as a specialist who uses special knowledge, skill, training or experience to provide testimony to aid the factfinder. Discusses the criteria and qualifications that should guide the selection of a forensic accounting expert witness. Outlines the areas of expertise within forensic accounting: investigative accounting, economic loss calculation, business and intangible asset valuation. Describes how the expert is matched to the engagement, using six examples; these include misappropriation of funds, business interruption, valuation of a business interest, construction contract damage, marital dissolution, and breach of contract. Refers to the Daubert and Kumho Tire cases, where expertise was challenged as “junk science”, and considers the “beauty contest” choice between two similarly qualified and experienced practitioners.

Longitudinal Value Relevance of Earnings and Intangible Assets: Evidence from Australian Firms

Abstract: Recent U.S. studies report earnings value relevance has declined over time. Some authors suggest non-recognition of intangible assets in the U.S. is a major reason for declining earnings value relevance. However, the evidence is mixed on the effect of non-recognition of intangible assets. To examine this conjecture, this paper examines earnings value relevance for Australian firms since Australian GAAP has not prohibited intangible asset recognition. Using a variety of established models and specifications, our results indicate that for the average firm, there is weak evidence of decline in earnings value relevance. However, firms that capitalize intangibles have increasing earnings value relevance. Further, the magnitude of the difference in earnings value relevance between capitalizing firms and non-capitalizing firms is most pronounced in the latter part of the 1990s and this difference is increasing.

Practices Enhancing Patent Externalization

Abstract: Recognizing the importance of developing patent externalization potential in organizations, our study evaluates - the competitive intelligence gathenng practices, enabling organizational practices and the externalization practices which cumulatively help in developing this patent externalization potential. An empirical study (n = 119) was conducted for assessing the perceptions of professionals from the IT and pharmaceutical sectors in order to gain an insight into their present views. Cluster analysis and multiple discriminant analysis are employed for identifying the practices that managers currently perceive as important. Stepwise regression analysis verifies these results. Thus, it was identified that those practices which are missing in the prevailing organizational setup the managers need to incorporate within their organizations for ensuring better patent externalization potential of their organizations. INTRODUCTION The prevailing hypercompetitive environment has compelled organizations to adopt more aggressive patenting strategies to extract tangible benefits from this intangible asset (Tsuji, 2002). Patents in today's knowledge-based economy transcend their conventional protectionist role. Some of the manifold benefits realized from patents include-tapping new revenues from licensing and cross-licensing deals; boosting RD attracting venture capital and new investments by enhancing corporate value; and exploiting new technology and market opportunities through alliances based on their bargaining power (Pakes, 1985; Sullivan and Daniele, 1996; Rivette and Kline, 2000). Thus, through proper configuration and deployment of patents, organizations can successfully establish proprietary market advantage, improve financial performance and enhance their competitiveness. This essentially implies that organizations should aggressively pursue patent externalization. The concept of patent externalization is subtly different from patent commercialization. We define patent externalization as the utilization of patents for communicating the potential value embedded within the patents (Bhaduri and Mathew, 2003). The consequent value addition is realized at three levels -organization, individual and society-either as financial benefit or as knowledge benefit. While financial benefit may be immediately realized, knowledge benefit accrued is transcribed into tangible gains only in the long run. It is this long-term perspective embedded in patent externalization that contrasts it from patent commercialization. The latter considers only immediate financial gains and thus, has a short-term perspective. The knowledge gain realized promises considerable potential for future growth. Therefore, in our research we focus on patent externalization process as it classifies as a holistic tool for acquiring sustainable competitive advantage. LITERATURE REVIEW We conducted a literature review with the objective of identifying the practices that help in the development of patent externalization potential of organizations. The role of patents as tools for extraction of strategic competitive intelligence enabling better planning of future strategies has been considerably explored (Campbell, 1983; Narin et al, 1987; Ashton and Sen, 1988; Mogee, 1991; Brockhoff, 1992). There is a noticeable dearth of literature regarding the desired organizational practices necessary for supporting patent externalization. We review the organizational practices that support patent productivity and RD Shapiro, 1990; Berkowitz, 1993; Ransley and Rogers, 1994; Ransley and Gaffney, 1997). …

Valuing IP Post-Sarbanes-Oxley: It's No Longer a Matter of Making a Best Estimate

Abstract: EXECUTIVE SUMMARY * ALTHOUGH SARBANES-OXLEY SETS NO SPECIFIC requirements for CPAs valuing intellectual property, it does put greater emphasis on accurate valuation of all assets and imposes punishments on CEOs and CFOs for failure to do so. * INTANGIBLE ASSETS OF ALL KINDS, INCLUDING PATENTS, brand names, in-process research and the like, have become increasingly important to the economic value of a business. This makes it critical to accurately disclose the facts about intellectual property. * SARBANES-OXLEY ISN'T THE ONLY RECENT development affecting IP valuation. FASB Statement nos. 141 (intangible asset identification upon acquisition) and 142 (annual intangible asset fair value measurement) require companies to measure and report on the financial performance of acquired intangible assets. * VALUING IP RAISES COMPETITIVE ISSUES over divulging asset values companies might prefer to keep secret. Companies must balance their need to protect proprietary information with disclosure requirements. * CPAs CAN HELP COMPANIES CHOOSE FROM AMONG several methods for valuing IP assets. These include the market, cost and income approaches. With the market approach, a company compares its IP assets with similar assets in the marketplace that have a known value. The cost approach values IP based on the cost to obtain it; the income approach values it based on its income-producing ability. ********** Before 2002, identifying and valuing intellectual property (IP) was more art than science. But in that year Congress passed the Sarbanes-Oxley Act and FASB issued new accounting standards for measuring and reporting on intangible assets. In this high-pressure environment CPAs will find IP valuation is no longer a matter of making a best estimate. As regulators begin to seek greater clarity in the asset values of publicly traded companies and require them to make more transparent disclosures, the onus is on CPAs to apply more scientific rigor to their IP valuations. But certifying with mathematical exactitude the full value of intangibles such as patents, brands, in-process research and other IP assets can be problematic. This article describes the valuation issues CPAs face with intangible assets, the rules they must follow and how they can avoid some pitfalls in the search for a value that meets all requirements. VALUATION CHALLENGES When it comes to valuing IP, there is nothing in Sarbanes-Oxley that says, "Do this or do that," says James Rigby, CPA, a managing director in the Los Angeles office of the Financial Valuation Group, a consulting firm specializing in valuation and performance issues. "What Sarbanes-Oxley does do is imply a greater responsibility for recording IP assets on the financial statements. The legislation didn't change anything in terms of what people should be doing. It just imposed greater responsibility and punishment." Sarbanes-Oxley says companies "must be more rigorous, accurate and inclusive as far as the material effect of all assets on the bottom line, and then sign off that the numbers are on the money," agrees Gary Morris, a partner and IP specialist in the Washington, D.C., office of law firm Kenyon & Kenyon. While this level of accuracy generally includes IP, it's virtually impossible to accomplish with intangible assets such as a patent, copyright or brand name. Sarbanes-Oxley and FASB Statement no. 141, Business Combinations, and Statement no. 142, Goodwill and Other Intangible Assets, converge with another trend--the increasing importance of intangibles to the value of a business. "IP has increased economic value, requires review by top executives and is garnering enhanced interest from regulators," says Edward Black, a partner and head of the IP practice group at Boston-based law firm Ropes & Gray. Twenty years ago, intangible assets weren't that important--bricks and mortar were the key assets. …

The Impact of Reputation in the Performance of the Organization in the Perspective of Members of the Cooperatives

Abstract: Corporate reputation (CR) is often an important intangible asset of a company. This study investigates the role of CR on cooperative members’ behavior and organizational performance, considering loyalty, satisfaction, trust and image. The study aims to verify the effects of communication, culture and satisfaction with management as antecedents of CR. To achieve the research objectives and based on a literature review, the study proposes a conceptual framework and tests the framework using structural equation modeling. For this purpose, 263 valid questionnaires were collected a research sample comprised of members of the biggest dairy three co-operatives in Iberia. The results show that communication has an impact on CR as well as on culture and on satisfaction with management. CR has a significant impact on co-operatives members’ loyalty and performance. The model provides a wider comprehension of the CR concept and introduces both the drivers and consequences.

Competitive response: a new lens for evaluating company performance

Abstract: The global business environment companies compete in today is more complex, turbulent, and dynamic than it has been in decades. Not since the early part of the 20th century have businesses operated with so much uncertainty, volatility, and risk as they struggle to grow and compete for advantage in a global marketplace. Top executives are being exhorted at every turn to be faster, more nimble, more resilient, and more adaptive. They are recreating their global enterprises, in some cases from the ground up. Transformation is the new watchword and speed the new imperative. This new business environment is forcing top executives to re-think how they compete, and what capabilities they need to do so. Most are in the business of playing catch up. After spending a good part of the last decade focused primarily on internal priorities, businesses are once again shifting their attention outward. As companies shift their focus, it is becoming increasingly apparent that speed is only one of many new competitive mandates. Adding to the challenge, as pointed out in a recent Harvard Business Review article, is that speed, like many of the capabilities companies need – such as leadership and talent – is an intangible asset. 1

Intellectual Property Appraisal by Fuzzy Multiple Goals Decision-making Method

Abstract: As intangible asset,intellectual property has great valueThere are many uncertainty and illegibility during appraisal,the appraisal methods used now have some disadvantage,so in this paper,we construct and apply Fuzzy Multiple Goals Decision-making Method Model for intellectual property appraisal,and hope that it can help the companies appraise its value properly

The Application of Combination Forecast Based on Rough Set Theoryin Measuring Intangible Asset Valuation

Abstract: In order to assess intangible asset of enterprise, a quantitative model that assesses the intangible asset of enterprises is constructed using combination forecast method based on rough set theory, In the method, the determination of weight coefficients is translated into estimating significance of attributes among rough set The proposed approach largely overcomes the subjectivity of traditional detemination of weight coefficients, and makes the detemination of weight coefficients more objective Finally, the application of combination forecast based on rough set theory in measuring intangible asset valuation is demonstrated with a practical example, further shows the effectiveness and practicability of the method proposed in this paper

Study on Promoting Intangible Asset Value of National Games

Abstract: Through using the method of literature,expert interview and investigation,this paper makes discussion on the necessity,feasibility and possible way of promoting intangible asset value of National Games.The result shows that we should strengthen the cognition on intangible asset of National Games,insist on principle of mutual benefit,establish the specific management departments,organize the professional team,build on uniformity and continuation,promote the profession and inheritance,take the brand of National Games as core,extensively exploit the intangible asset,richen the social function of National Games,foster good social base,stress the guide of enterprises,increase the cooperation with media,perfect the construction of law and regulation,strengthen the scientific research.

Institutional Design of Business Permanent Development

Abstract: Impartiality can't be realized at the start point,but may be realized at the end point.For end impartiality,government should introduce inheritance duty and corporate social responsibility.On this condition,corporations should take on social responsibility bravely,and donate in the form of foundation.For corporations,the donation in the form of foundation is a rational action.By donation,corporations can turn tangible assets into intangible assets.In form of intangible assets,corporations can pass the "narrow channels",which refers to threats in the way of their development,and obtain permanent development.

The IASB's Research Project on Intangible Assets and Goodwill led by the AASB

Abstract: In October 2002, the IASB asked the AASB to take responsibility for a broad and long-term research project on intangible assets and goodwill. The project is, with some exceptions, a comprehensive project comprising two interrelated phases to be undertaken sequentially: (1) accounting for internally generated intangible assets, internally generated goodwill and separately purchased intangible assets; and (2) accounting for intangible assets and goodwill acquired in a business combination. Phase 2 will involve a post-implementation review of the intangible asset and goodwill aspects of IFRS 3 Business Combinations, and the amendments to IAS 36 Impairment of Assets and IAS 38 Intangible Assets that give effect to IFRS 3. Prior studies have indicated that reliable measurement poses a significant impediment to the recognition, measurement and remeasurement of intangible assets. Consequently, a major emphasis of the project will be on issues relating to reliable measurement. This paper outlines the project and reports on the initial stages of the project work.