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Article
Publication date: 11 October 2021

Fernanda Cristina Lopes and Luciana Carvalho

The intangible assets of a company have been presented by national and international surveys as a resource to influence the creation of value and the increase in…

Abstract

Purpose

The intangible assets of a company have been presented by national and international surveys as a resource to influence the creation of value and the increase in organizational performance. In view of this, this study aims to analyze the relationship between intangibility and the performance of companies in Latin America.

Design/methodology/approach

For this purpose, multiple regression with panel data was used and three perspectives for measuring intangible resources were defined: representativeness of the intangible asset, accounting measure for measuring the intangible, degree of intangibility and Tobin’ Q, the latter two representing economic and financial measures to determine intangibility. The study covered the period from 2011 to 2017 with a sample of 1,236 publicly traded companies located in some Latin American countries, namely, Argentina, Brazil, Chile, Colombia, Mexico and Peru.

Findings

The results demonstrated the existence of a significant and positive relationship between the variables of intangibility, degree of intangibility and Tobin’s Q, and the performance variables, return on assets, operating margin and asset turnover, reinforcing the study hypothesis that the greater the investment in intangible resource, the greater the company’s performance.

Research limitations/implications

The limitations of this study involve the lack of complete information about intangible resources in the financial statements of some companies and some countries, making it hard to analyze the proposed relationship more broadly and accurately. Another limitation involves the causal relationship that may have existed between the regressors of the models defined in the study and their error, thus generating an endogeneity problem in the proposed models. It is recommended for future research to use specific methods to mitigate possible problems of endogeneity in regressions.

Practical implications

Mainly the possibility of deepening the relationship between intangibility and business performance, thus obtaining new knowledge through the reflexes of this relationship on companies in Latin American countries, finding more consistent results.

Social implications

The study contributes to the decision-making process in the business world by informing the primary users of accounting information such as investors, administrators, accountants, regulators and creditors.

Originality/value

This research contributes by addressing a theme whose studies present many gaps, making it possible to deepen the relationship between intangibility and business performance and gain new knowledge through the reflexes of this relationship on companies in Latin American countries.

Details

RAUSP Management Journal, vol. 56 no. 4
Type: Research Article
ISSN: 2531-0488

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Article
Publication date: 10 October 2021

SangGon (Edward) Lim and Chihyung “Michael” Ok

This study aims to provide a better understanding of how gift card receivers react to the types of gift cards. This study examined the effect of gift card types (intangible

Abstract

Purpose

This study aims to provide a better understanding of how gift card receivers react to the types of gift cards. This study examined the effect of gift card types (intangible experiences vs less intangible experience vs tangible goods) on a recipient’s willingness to spend more through emotions and perceived effort (Study 1) and on feeling of appreciation (Study 2).

Design/methodology/approach

Study 1 adopted a scenario-based 2 (tangible vs intangible) × 3 ($100 vs $200 vs $300) between-subjects design. Study 2 narrowed the scope of gift card type (intangible vs less intangible).

Findings

Receivers tended to perceive less effort in gift card selection and feel less emotion when receiving gift cards for intangible experiences than when receiving gift cards for both tangible and less intangible products. However, as face value increased, gift card receivers for intangible experiences felt more pleasure and, in turn, rated higher willingness to spend more money than face value than those with gift cards for tangible products.

Research limitations/implications

Future studies can rule out alternative explanations related to brand-related effects, previous experiences and personal preferences.

Practical implications

Service providers should put more effort into tangibilizing the intangibles to reduce receivers’ uncertainty. Also, they can increase their profitability by stimulating gift card receivers’ willingness to spend more money through pleasure.

Originality/value

Answering research calls for examining consumers’ perceptions of different gift card types, this study might be the first to unveil the differential effect of gift card types associated with the tangibility of products on purchase behavior and the underlying emotional mechanism.

Details

Journal of Services Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0887-6045

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Article
Publication date: 4 September 2007

Annie Green

The purpose of this paper is to present valuation, economic, and corporate management aspects related to the design and implementation of intangible asset valuation in

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2795

Abstract

Purpose

The purpose of this paper is to present valuation, economic, and corporate management aspects related to the design and implementation of intangible asset valuation in common business language.

Design/methodology/approach

The methodology or approach to identifying or naming intangible assets within the business environment was used.

Findings

The purpose of intangible asset valuation is to understand what the intangible asset is and how it affects the bottom line of the business. Understanding the reason for the intangible asset valuation, whether for tax purposes, corporate planning, or dispute resolution, is paramount when considering the nature of the intangible asset to be valued.

Originality/value

Intangible assets are generally not included in active company management. Many companies do not recognize or investigate ways to maximize the income to be derived from intangible assets or other benefits of a centralized intangible asset management program. Fundamental to valuing intangible assets are their identification and subsequent representation. As presented in this paper, the three categories of intelligence identify intangible assets by the business value drivers that comprise them.

Details

VINE, vol. 37 no. 3
Type: Research Article
ISSN: 0305-5728

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Article
Publication date: 1 December 2003

Manuel García‐Ayuso

An overwhelming literature on intangibles has been published over past three decades. Based on the evidence provided by recent research studies and the experiences of…

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2287

Abstract

An overwhelming literature on intangibles has been published over past three decades. Based on the evidence provided by recent research studies and the experiences of companies and policy makers this article provides a summary of our current knowledge on intangibles and suggests some directions for future research and for the improvement of management and reporting practices, as well as of policy making.

Details

Journal of Intellectual Capital, vol. 4 no. 4
Type: Research Article
ISSN: 1469-1930

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Article
Publication date: 10 May 2013

Bernard Mnzava

The aim of this research is to analyse the impact of intangible assets on firm’s sporting and financial performance.

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1080

Abstract

Purpose

The aim of this research is to analyse the impact of intangible assets on firm’s sporting and financial performance.

Design/methodology/approach

The hypothesis of this research was developed through grounded theory and previous findings from the literature. This study adopted multiple regression method to analyse the impact of intangible assets on sporting and financial performance.

Findings

The findings indicate that intangible assets affect both sporting and financial performance. This is consistent with resource‐based view theory, which maintains that firms achieve a sustainable competitive advantage and superior financial performance by owning or controlling intangible strategic assets. By intangible strategic assets, it is meant the specific and valuable capability that belongs to the organisation.

Research limitations/implications

The finding of this study is limited to a sample of UK listed soccer corporations. A possible opportunity of future research is to replicate the current study with other corporations and explore alternative measures of intangible assets.

Originality/value

The main innovation contained in this study relies on the measure of intangible assets. This paper employed players’ registration costs as a measure of intangible assets. To my knowledge this has not been addressed before in finance and accounting research.

Details

Sport, Business and Management: An International Journal, vol. 3 no. 2
Type: Research Article
ISSN: 2042-678X

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Article
Publication date: 1 March 2002

Jason Hurwitz, Stephen Lines, Bill Montgomery and Jeffrey Schmidt

Intangible assets have grown in size and importance to individual firms and to the economy as a whole. Many have examined and written about ways to value the intangible

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3485

Abstract

Intangible assets have grown in size and importance to individual firms and to the economy as a whole. Many have examined and written about ways to value the intangible assets of firms and the overall economy. Professor Baruch Lev of New York University has developed an approach to measure intangibles performance for any company, or division of a company, that uses GAAP financial reporting and that has publicly traded equity. Professor Lev has also established how intangibles performance is linked to stock returns. The collaborative research of the co‐authors has extended this linkage by identifying certain management practices as drivers of intangibles performance. The culmination of this work is a breakthrough – for the first time, specific management practices can be linked to stock returns.

Details

Journal of Intellectual Capital, vol. 3 no. 1
Type: Research Article
ISSN: 1469-1930

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Article
Publication date: 1 March 2005

Annie Green and Julie J.C.H. Ryan

This study investigates the adequacy of existing intangible asset models and defines and codifies common principal valuation drivers of intangible assets for use in…

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5804

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 target audience is CEOs and CFOs; and emphasis is on the Score Card (SC) type model as classified by Sveiby. Future studies could expand the geographic circumference, the scope to other industry sectors, and the target audience to other decision makers

Practical implications

The framework of intangible valuation areas (FIVA) allows a business to identify and link performance measurements/indicators to its intangible value drivers. It supports the capture and subsequent evaluation of leading and lagging indicators in the achievement of a knowledge management strategy.

Originality/value

FIVA provides a framework to have command of and access to effective utilization of business resources and knowledge, to develop, sustain and enhance its mission effectiveness and/or competitive advantage.

Details

Journal of Intellectual Capital, vol. 6 no. 1
Type: Research Article
ISSN: 1469-1930

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Article
Publication date: 1 September 2002

Tomi Hussi and Guy Ahonen

The relevance of intangible assets for financial performance is getting more widely accepted. There is also some convergence about the conceptual structure of intangibles

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2839

Abstract

The relevance of intangible assets for financial performance is getting more widely accepted. There is also some convergence about the conceptual structure of intangibles. What has not been underlined enough yet is the synergic nature of different types of intangibles. In this paper, it is argued, in the light of a case study of nine Finnish companies, that the intangibles form a value chain of generative and commercially exploitable intangibles. Furthermore, it is argued that each company at each time has an emphasis on a certain type of intangibles, sometimes even neglecting others. The paper seeks to propose that it is important to identify the primary intangibles and their current relationships with other forms of intangibles. The management of intangibles is hence a matter of integration and delicate balance.

Details

Journal of Intellectual Capital, vol. 3 no. 3
Type: Research Article
ISSN: 1469-1930

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Article
Publication date: 12 June 2007

Larry Nash White

The purpose of this paper is to examine the needs to assess the value and impact of the intangible resources and efforts produced by the library.

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1758

Abstract

Purpose

The purpose of this paper is to examine the needs to assess the value and impact of the intangible resources and efforts produced by the library.

Design/methodology approach

A literature overview is used to provide the background of intangibles assessment and its application in libraries, with examples of library intangible resources used and efforts produced, and reviews the possible benefits for libraries in adopting and effectively utilizing intangible assessment.

Findings

The library has multiple intangible assets, resources, and efforts it produces that are not generally accounted for in annual assessments, accountability reporting, or budget planning. Learning to account for and include the intangibles used/produced by the library will increase the library's capability to address accountability concerns of stakeholders, more effectively align the library's resources with strategic responses, and more effectively utilize intangible assets and resources.

Originality/value

Increased reporting and usage of intangible resources/products by the library could provide library administrators with a proactive means of increasing the effectiveness and scope of library assessment, valuation, and resource planning and usage.

Details

The Bottom Line, vol. 20 no. 2
Type: Research Article
ISSN: 0888-045X

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Article
Publication date: 25 October 2011

Alan Fustec and Tanguy Faroult

According to several authors 50 per cent of mergers and acquisitions (M&A) operations destroy value. The aim of this paper is to study the reasons why it happens and to…

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1580

Abstract

Purpose

According to several authors 50 per cent of mergers and acquisitions (M&A) operations destroy value. The aim of this paper is to study the reasons why it happens and to seek to reveal that intangible assets, which are increasingly important in today's economy, must be better assessed during the due diligence phase.

Design/methodology/approach

The authors present a part of the French intangible assets measurement approach, which has been published by the French Intangible Assets Observatory. The methodology proposes an extended balance sheet which is an interesting addition to the IAS‐IFRS intangible standard. It identifies 12 classes of intangible assets including human capital and customer capital.

Findings

The paper proposes a due diligence approach, using the French methodology and applies it to the insurance sector.

Research limitations/implications

This paper is not an academic paper. However, a significant research program is now underway in France. Academic publications are expected to be submitted.

Practical implications

The practice of intangible due diligence is a key issue in today's increasingly intangible economy. This practice is on the verge of a very strong development.

Originality/value

The paper presents a systemic approach to intangible assets. It answers a key question: what are the main assets that are necessary to start and continue a process of value creation? Accounting only recognizes the intangible assets that are not overly volatile, for prudential reasons. But even if customers or teams are “too intangible” for accountants, they are required to generate cash flows. If they are not evaluated, the process of wealth creation is not under control. This is crucial in M&A.

Details

Journal of Intellectual Capital, vol. 12 no. 4
Type: Research Article
ISSN: 1469-1930

Keywords

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