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Article

Marilei Osinski, Paulo Mauricio Selig, Florinda Matos and Darlan José Roman

The competitive model has changed. In this context, society entered into an era in which intangible assets are the greatest assets of a company. However, some gaps and…

Abstract

Purpose

The competitive model has changed. In this context, society entered into an era in which intangible assets are the greatest assets of a company. However, some gaps and uncertainties are presented in the literature as to understand the value of a company based on knowledge intensive activities. The purpose of this paper is to analyze the methods of evaluation of intangible assets in the context of business, economic and strategic management.

Design/methodology/approach

This is a qualitative research. This research is characterized as descriptive, bibliographic, inductive.

Findings

The main results of this research can highlight the existence of valuation methods of intangible assets intended for specific industries, as public and/or private, that can be better aligned to the context of business; economic and/or strategic management.

Originality/value

It was found that intangible assets are a current topic and increasingly addressed in the literature.

Details

Journal of Intellectual Capital, vol. 18 no. 3
Type: Research Article
ISSN: 1469-1930

Keywords

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Article

Susanne Durst

The purpose of this paper is to study the perceptions of the advisors and valuers of German associations regarding the relevance of intangible assets in general, and for…

Abstract

Purpose

The purpose of this paper is to study the perceptions of the advisors and valuers of German associations regarding the relevance of intangible assets in general, and for the purpose of company succession in particular.

Design/methodology/approach

To perform this study German associations were examined, which play an essential role in company succession in Germany, from both sides of the process. Conducting a web‐survey, 51 answers were received (response‐rate = 42.5 per cent) which could be used for the analyses.

Findings

Amongst others, the study showed that intangible assets are of a moderate relevance. However, a large proportion of respondents expect intangible assets to be of greater relevance in the future. The study highlighted that intangibles do have a great impact on the decision‐making process of an investor.

Research limitations/implications

The total population of German Association is 135. The author received answers from 51 associations, which did not fulfil the statistical size to conduct advanced statistical methods. The specific relationship of German associations with small‐ to medium‐sized enterprises (SMEs) is rather unique compared to similar institutions around the world, therefore, the results may not be replicable in other countries.

Practical implications

The results of this study will help practitioners as well as academics to better understand the relevance of intangible assets in SMEs.

Originality/value

This paper is pioneering in the analysis of the influence of intangible assets in German SMEs for the purpose of company succession.

Details

Journal of Intellectual Capital, vol. 9 no. 3
Type: Research Article
ISSN: 1469-1930

Keywords

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Article

Roberta Costa and Simonluca Evangelista

Brand equity has recently emerged as an important research area in marketing and it has been examined from practical and academic perspectives. Following this lead, the

Abstract

Purpose

Brand equity has recently emerged as an important research area in marketing and it has been examined from practical and academic perspectives. Following this lead, the purpose of this paper is to propose a new method to evaluate the impact of brand intangible assets on a firm value creation process.

Design/methodology/approach

The paper proposes an approach based on Analytic Hierarchy Process (AHP) technique, illustrating its efficacy in the measurement of the value of brand intangible assets and its capacity to overcome the flaws of current methods.

Findings

The outcomes of the AHP application should be considered as a KPI enabling management to optimize brand investments and strategies. The paper concludes with an application of the presented method on a famous multi‐brand company.

Originality/value

This methodology puts in evidence the fundamental aspects of brand intangible assets and, above all, how much they impact on the firm value creation process.

Details

Measuring Business Excellence, vol. 12 no. 2
Type: Research Article
ISSN: 1368-3047

Keywords

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Article

Fabio Fiano, Jens Mueller, Niccolò Paoloni, Massimiliano Farina Briamonte and Domitilla Magni

The purpose of this paper is to enrich the scientific and managerial debate on intangibles by placing the concept of key money within the broader concept of Intellectual…

Abstract

Purpose

The purpose of this paper is to enrich the scientific and managerial debate on intangibles by placing the concept of key money within the broader concept of Intellectual Capital, and by proposing an evaluation approach for a portion of the latter, focusing the analysis on fashion retailers.

Design/methodology/approach

This research focuses on the fashion industry, given that key money gains particular significance and accounted for in fashion retailers' financial statements. A comparative case study is presented with regard to the application of two evaluation methods proposed to some fashion retailers operating in Italy.

Findings

This paper defines a suitable placement for key money within the vast structure of intellectual capital. The research shows that the two methods give “very close” key money values, thus laying the foundations for a theoretical articulation of interest to be further explored in future researches.

Originality/value

The document represents a first in-depth examination regarding the evaluation and inclusion of key money in the intellectual capital. A further element of originality lies in having interpreted the key money in a perspective closer to the world of intangibles and competitive strategies, to the detriment of the previous (meagre) settings that placed it within the real estate branches of study.

Details

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

Keywords

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Article

Giuseppe A. Busacca and Paolo Maccarrone

The purpose of this paper is to show whether and how International Financial Reporting Standards (IFRSs) are able to improve the quality of financial accounting…

Abstract

Purpose

The purpose of this paper is to show whether and how International Financial Reporting Standards (IFRSs) are able to improve the quality of financial accounting information concerning intangible assets.

Design/methodology/approach

Being part of a wider project investigating the ability of IFRSs to improve accounting information concerning intangibles, this paper analyses the application of some IFRSs' key innovations to Telecom Italia. Considered innovations include two of the most relevant areas of change between Italian accounting principles to IFRSs, i.e. business combinations and accounting for intangible assets with indefinite useful life. Quality of accounting information is measured through four key parameters: correctness, transparency, prudence, and timeliness. Representation provided by Italian accounting principles and US GAAP of selected accounting events are compared in terms of the four key parameters, and differences in accounting information quality are systematically observed.

Findings

The findings in this paper show that the use of value‐based measures in accounting actually leads to an improvement in the overall quality of information, by increasing correctness and transparency and leaving prudence and timeliness nearly unchanged. These early findings seem to support the conclusion that the path chosen by accounting evolution is correct, although some critical areas still exist.

Practical implications

The methodology proposed in this paper can represent a potential guideline for a wide range of researches concerning the quality of accounting information.

Originality/value

This paper provides three main contributions: a complete and structured critical review of literature on the evolution of accounting on intangible assets; an innovative framework to measure the quality of accounting information; a first in‐depth analysis of the key changes in accounting for intangibles induced by IFRSs on the balance‐sheets of Italian companies (through the case study).

Details

Journal of Intellectual Capital, vol. 8 no. 2
Type: Research Article
ISSN: 1469-1930

Keywords

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Article

Elena Shakina, Iuliia Naidenova and Angel Barajas

Focusing on managerial problems related to the measurement of intangibles, this paper develops and validates a hedonic-pricing methodology for the evaluation of the…

Abstract

Purpose

Focusing on managerial problems related to the measurement of intangibles, this paper develops and validates a hedonic-pricing methodology for the evaluation of the intangible resources of companies obtaining their shadow prices.

Design/methodology/approach

The paper adapts a hedonic-pricing methodology developed primarily for markets in real estate and secondhand cars to define how much intangibles may contribute to companies' market value. A certain calibration of the original tool has been developed to make this methodology appropriate for interpretation and practical use. The main advantage of this approach is that it allows for an evaluation of the shadow prices of intangible resources. These prices can be interpreted as the market value of the intangible resources which are not reflected on the balance sheet.

Findings

The results of this study demonstrate that hedonic pricing with a self-selection correction generates robust estimates. As one can see, the positive contribution of a high endowment of intangibles for all shadow prices is confirmed through estimations using two different techniques. Meanwhile, the negative effect of a low endowment is even more evident for the baseline model. This model shows consistent negative shadow prices for the majority of underinvested intangibles. Brands have the highest shadow prices in the introduced models; human capital, as measured by the qualification of top management and investments in employees, has likewise demonstrated high prices. However, most structural resources seem to be not reflected to a large degree in companies' market value.

Practical implications

This paper brings new opportunities to obtain the monetary value of intangible resources based on estimated market prices of a corporation's resource portfolio. These prices may be used for several purposes – for example, benchmarking for performance management, capital budgeting or knowledge-management practices. Moreover, by having methodological value, this study opens ways to evaluate any other intangibles which are not explicitly discussed in the empirical test of this particular study.

Originality/value

This study primarily contributes to the methodological advancement of evaluation of corporate intangible resources. It departs from the conventional hedonic-pricing mechanism to identify cogent estimates to intangibles in monetary terms. Importantly, this mechanism implies individual shadow prices for specific intangible resources which makes the contribution of this study unique for the existing literature, both within resource-based and value-based views.

Details

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

Keywords

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Book part

Anca E. Cretu and Roderick J. Brodie

Companies in all industries are searching for new sources of competitive advantage since the competition in their marketplace is becoming increasingly intensive. The…

Abstract

Companies in all industries are searching for new sources of competitive advantage since the competition in their marketplace is becoming increasingly intensive. The resource-based view of the firm explains the sources of sustainable competitive advantages. From a resource-based view perspective, relational based assets (i.e., the assets resulting from firm contacts in the marketplace) enable competitive advantage. The relational based assets examined in this work are brand image and corporate reputation, as components of brand equity, and customer value. This paper explores how they create value. Despite the relatively large amount of literature describing the benefits of firms in having strong brand equity and delivering customer value, no research validated the linkage of brand equity components, brand image, and corporate reputation, simultaneously in the customer value–customer loyalty chain. This work presents a model of testing these relationships in consumer goods, in a business-to-business context. The results demonstrate the differential roles of brand image and corporate reputation on perceived quality, customer value, and customer loyalty. Brand image influences the perception of quality of the products and the additional services, whereas corporate reputation actions beyond brand image, estimating the customer value and customer loyalty. The effects of corporate reputation are also validated on different samples. The results demonstrate the importance of managing brand equity facets, brand image, and corporate reputation since their differential impacts on perceived quality, customer value, and customer loyalty. The results also demonstrate that companies should not limit to invest only in brand image. Maintaining and enhancing corporate reputation can have a stronger impact on customer value and customer loyalty, and can create differential competitive advantage.

Details

Business-To-Business Brand Management: Theory, Research and Executivecase Study Exercises
Type: Book
ISBN: 978-1-84855-671-3

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Article

STEPHEN MORROW

This paper considers whether the prospective services provided by a football player on behalf of the club holding his registration can be recognised as an accounting asset

Abstract

This paper considers whether the prospective services provided by a football player on behalf of the club holding his registration can be recognised as an accounting asset. The first section of the paper considers the appropriateness of treating these prospective services as intangible assets within the terms of the UK Accounting Standards Board criteria for definition and recognition of assets. In the second section, four valuation methodologies are evaluated using case study data made available by a major Scottish club. Each of the methods evaluated is either currently used in accounting practice by some clubs, or is used in some form in the existing market place for players. The historical cost model involves capitalising players acquired by the club via the transfer market on the balance sheet at their cost of registration. The earnings multiplier model applies a multiplier to a player's earnings to produce a current valuation of that player. The third model involves capitalising players at directors' valuation, while the independent multiple player evaluation model involves obtaining valuations for players from various informed sources, knowledgeable on those particular players. The paper concludes that there are convincing arguments for the conceptualisation of the services provided by football players as accounting assets, and recommends an system of valuation in which players are valued at their realisable value by independent experts.

Details

Journal of Human Resource Costing & Accounting, vol. 1 no. 1
Type: Research Article
ISSN: 1401-338X

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Article

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…

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

Keywords

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Article

Samuli Aho, Sten Ståhle and Pirjo Ståhle

This paper seeks to examine the calculated intangible value (CIV) method as a measure of intellectual capital (intangibles) in enterprises. The aim is to show the benefits

Abstract

Purpose

This paper seeks to examine the calculated intangible value (CIV) method as a measure of intellectual capital (intangibles) in enterprises. The aim is to show the benefits and disadvantages of the method and its actual relation to intellectual capital.

Design/methodology/approach

The authors present a conceptual, theoretical and empirical analysis of CIV to assess its validity as a measure of firm's intangibles.

Findings

The result of the analyses is that CIV is connected to all types of capital assets (physical, financial, combined physical and financial and intangible) and thus it does not unambiguously relate or measure firm's intangible value(s). CIV should be seen solely as a measure of financial efficiency derived from companies' return on assets (ROA). CIV measures an overall financial recognized comparative advantage in comparison with competitors within the same branch of industry. There is no evidence to support the simplistic assumption that a company's CIV is a measure of its intellectual capital.

Originality/value

CIV is used quite widely for purposes of measuring intellectual capital in companies and industries. However, its validity has never been subjected to critical examination. The results of this paper provide valuable information on the reliable measurement of intellectual capital and the further development of these measurements.

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