Skip to main content
SpringerLink
Log in
Book cover

The Valuation of Digital Intangibles pp 9–61Cite as

Palgrave Macmillan

The Valuation of Intangible Assets: An Introduction

  • Chapter
  • First Online:

Abstract

An intangible is a non-monetary asset that manifests itself by its economic properties. It does not have physical substance but grants rights and economic benefits to its owner. The examination of the general approaches of the valuation of companies is preliminary to the estimation of assets such as the intangibles. Intangibles are more specific than other assets and incorporate higher information asymmetries, linked to higher risk profiles and lower collateral value. Their accounting is controversial, privileging prudence over substance. The most widely used approaches of assessing intangibles are based on market, income, or cost-related metrics. Hard-to-value intangibles are based on innovative business models, whose value drivers are difficult to analyze and compare.

This is a preview of subscription content, log in via an institution.

Chapter
USD   29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD   109.00
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD   139.00
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Learn about institutional subscriptions

Selected References

  • Alonso, B. V., Garcia-Merino, J. D., & Arregui-Ayastuy, G. (2015). Motives for financial valuation of intangibles and business performance in SMEs. Innovar, 25(56), 113–128.

    Google Scholar 

  • Arvidsson, S. (2011). Disclosure of non-financial information in the annual report: A management-team perspective. Journal of Intellectual Capital, 12(2), 277–300.

    Article  Google Scholar 

  • Bianchi, P., & Labory, S. (2017). The economy importance of intangible assets. London: Routledge.

    Google Scholar 

  • Boujelben, S., & Fedhila, H. (2011). The effects of intangible investments on future OCF. Journal of Intellectual Capital, 12(4), 480–494.

    Google Scholar 

  • Clausen, S., & Hirth, S. (2016). Measuring the value of intangibles. Journal of Corporate Finance, 40, 110–127.

    Article  Google Scholar 

  • Cohen, A. J. (2005). Intangible assets: Valuation and economic benefit. Hoboken: Wiley.

    Google Scholar 

  • Còrcoles, Y. R. (2010). Towards the convergence of accounting treatment for intangible assets. Intangible Capital, 6(2), 185–201.

    Google Scholar 

  • Damodaran, A. (2018). The dark side of valuation (3rd ed.). Pearson FT Press PTG.

    Google Scholar 

  • Donaldson, T. H. (1992). The treatment of intangibles. A banker’s view. New York, NY, USA: St Martin’s Press.

    Book  Google Scholar 

  • Dosso, M., & Vezzani, A. (2017). Firm market valuation and intellectual property assets (JRC Working Papers on Corporate R&D and Innovation). Seville.

    Google Scholar 

  • Fazzini, M. (2018). Business valuation: Theory and practice. Palgrave Macmillan: London.

    Google Scholar 

  • Fernandez, P. (2001). Valuation using multiples. How do analysts reach their conclusions? Madrid: IESE Business School.

    Google Scholar 

  • Gamayuni, R. R. (2015). The effect of intangible assets, financial performance and financial policies on the firm value. International Journal of Scientific & Technology Research IJSTR, 4(1), 202–212.

    Google Scholar 

  • Garcìa-Meca, M., Parra, I., Larràn, M., & Martinez, I. (2005). The explanatory factors of intellectual capital disclosure to financial analysts. European Accounting Review, 14(1), 63–94.

    Article  Google Scholar 

  • Garcìa-Parra, M., Simo, P., Sallan, J. M., & Mundet, J. (2009). Intangible liabilities: Beyond models of intellectual assets. Management Decisions, 47(5), 819–830.

    Article  Google Scholar 

  • Giuliani, M. (2013). Not all sunshine and roses: Discovering intellectual liabilities “in action”. Journal of Intellectual Capital, 14(1), 127–144.

    Article  Google Scholar 

  • Giuliani, M., & Marasca, M. (2011). Construction and valuation of intellectual capital: A case study. Journal of Intellectual Capital, 12(3), 377–391.

    Article  Google Scholar 

  • Gruber, S. (2015). Intangible values in financial accounting and reporting. An analysis from the perspective of financial analysts. Springer: Wiesbaden.

    Google Scholar 

  • Hall, R. (1993). A framework linking intangible resources and capabilities to sustainable competitive advantage. Strategic Management Journal, 14, 607–618.

    Article  Google Scholar 

  • Hand, J., & Lev, B. (2003). Intangible assets: Values, measures and risks. Oxford: Oxford University Press.

    Google Scholar 

  • Haskel, J., & Westlake, S. (2017). Capitalism without capital: The rise of the intangible economy. Princeton: Princeton University Press.

    Book  Google Scholar 

  • Hilton, B. J. (2015). Intangible and valuation in the age of knowledge. ISSS Journals, 1(1).

    Google Scholar 

  • Huffman, L. (1983). Operating leverage, financial leverage, and equity risk. Journal of Banking & Finance, 7(2), 197–212.

    Article  Google Scholar 

  • Jarrett, J. E. (2018). Methods of evaluating the value of intangible assets. University of Rhode Island: Digital Commons URI.

    Google Scholar 

  • Jow-Ran, C., Mao-Wei, H., & Feng-Tse, T. (2005). Valuation of intellectual property: A real option approach. Journal of Intellectual Capital, 6(3), 339–356.

    Google Scholar 

  • Kaplan, R., & Norton, D. (1996). The balanced scorecard: Translating strategy into action. Boston: Harvard Business School Press.

    Google Scholar 

  • Koller, T., & Goedhart, M. (2015). Valuation: Measuring and managing in the value of companies. McKinsey & Company: Wiley, Hoboken, New Jersey.

    Google Scholar 

  • Lagrost, C., Martin, D., Dubois, C., & Quazzotti, S. (2010). Intellectual property valuation: How to approach the selection of an appropriate valuation method. Journal of Intellectual Capital, 11(4), 481–503.

    Google Scholar 

  • Lennard, A. (2018). Intangibles: First thoughts. Paper presented at IFASS Meeting, Mumbai. Available at https://www.efrag.org/Assets/Download?assetUrl=%2Fsites%2Fwebpublishing%2FMeeting%20Documents%2F1709060811163678%2F05-02%20FRC%20presentation%20on%20Intangibles%20TEG%2018-04-06.pdf&AspxAutoDetectCookieSupport=1.

  • Lev, B. (2001). Intangibles: Management, measurement and reporting. Washington, DC: Brookings Institute Press.

    Google Scholar 

  • Lev, B. (2018). Intangibles. New York University Stern School of Business. Available at SSRN: https://ssrn.com/abstract=3218586.

  • Lev, B., & Gu, F. (2016). The end of accounting and the path forward for investors and managers. Hoboken, NJ: Wiley.

    Book  Google Scholar 

  • Lim, S. C., & Macias, A. J. (2014). Intangible assets and capital structure. Paper presented at Paris Finance meeting EUROFIDAI-AFFI, December 2016.

    Google Scholar 

  • Madden, B. J. (2017). The purpose of the firm, valuation, and the management of intangibles. Journal of Applied Corporate Finance, 29(2), 76–86.

    Article  Google Scholar 

  • Maditinos, D., Chatzoudes, D., Tsairidis, C., & Theriou, G. (2011). The impact of intellectual capital on firms’ market value and financial performance. Journal of Intellectual Capital, 12(1), 132–151.

    Article  Google Scholar 

  • Metha, A. N. D., & Madhani, P. M. (2008). Intangible assets—An introduction. The Accounting World, 8(9), 11–19.

    Google Scholar 

  • Moro Visconti, R. (2012). Exclusive patents and trademarks and subsequent uneasy transaction comparability: Some transfer pricing implications. Intertax, 40(3), 212–219.

    Google Scholar 

  • Moro Visconti, R. (2013). Evaluating know-how for transfer price benchmarking. Journal of Finance and Accounting, 1(1).

    Google Scholar 

  • Moro Visconti, R. (2019). How to prepare a business plan with excel (June 1, 2019). Available at SSRN: https://ssrn.com/abstract=2039748.

  • OECD. (2017, July). Transfer pricing guidelines for multinational enterprises and tax administrations. Available at https://www.oecd.org/tax/oecd-transfer-pricing-guidelines-for-multinational-enterprises-and-tax-administrations-20769717.htm.

  • OECD. (2018). Guidance for tax administrations on the application of the approach to hard-to-value intangibles. Available at https://www.oecd.org/tax/transfer-pricing/guidance-for-tax-administrations-on-the-application-of-the-approach-to-hard-to-value-intangibles-BEPS-action-8.pdf.

  • Osinski, M., Selig, P. M., Matos, F., & Roman, D. J. (2017). Methods of evaluation of intangible assets and intellectual capital. Journal of Intellectual Capital, 18(3), 470–485.

    Google Scholar 

  • Parr, R. L. (2018). Intellectual property: Valuation, exploitation and infringement damages (5th ed.). Hoboken, NJ: Wiley.

    Google Scholar 

  • Pastor, D., Glova, J., Liptak, F., & Kovac, V. (2017). Intangibles and methods for their valuation in financial terms: Literature review. Intangible Capital, 12(2), 387–410.

    Article  Google Scholar 

  • Piekkola, H. (2014). Intangible investment and market valuation. The Review of Income and Wealth, 62(1), 28–51.

    Article  Google Scholar 

  • Reilly, R. F., & Schweihs, R. P. (1999). Valuing intangible assets. New York: McGraw-Hill.

    Google Scholar 

  • Reilly, R. F., & Schweihs, R. P. (2016). Guide to intangible asset valuation. New York: Wiley.

    Book  Google Scholar 

  • Roslender, R., & Fincham, R. (2001). Thinking critically about intellectual capital accounting. Accounting, Auditing & Accountability Journal, 14(4), 383–399.

    Article  Google Scholar 

  • Salinas, G., & Ambler, T. (2009). A taxonomy of brand valuation practice: Methodologies and purposes. Journal of Brand Management, 17(1), 39–61.

    Article  Google Scholar 

  • Sandner, P. (2010). The valuation of intangible assets. An exploration of patent and trademark portfolios. Wiesbaden: Springer.

    Book  Google Scholar 

  • Saunders, A., & Brynjolfsson, E. (2016). Valuing information technology related intangible assets. MIS Quarterly, 40(1), 83.

    Article  Google Scholar 

  • Singh, J. P. (2013). On the intricacies of cash flow corporate valuation. Advances in Management, 6(3), 15–22.

    Google Scholar 

  • Singh, S., & Kansal, M. (2011). Voluntary disclosures of intellectual capital: An empirical analysis. Journal of Intellectual Capital, 12(2), 301–318.

    Article  Google Scholar 

  • Smith, G. V., & Parr, R. L. (2000). Valuation of intellectual property and intangible assets. New York: Wiley.

    Google Scholar 

  • Sullivan, P. H., Jr., & Sullivan, P. H., Sr. (2000). Valuing intangibles companies—An intellectual capital approach. Journal of Intellectual Capital, 1(4), 328–340.

    Google Scholar 

  • Vetoshkina, E. Y., & Tukhvatullin, R. S. (2015). Economic efficiency estimation of intangible assets use. Mediterranean Journal of Social Sciences, 6(1 S3), 440.

    Google Scholar 

  • Zambon, S., & Marzo, G. (2007). Visualizing intangibles: Measuring and reporting in the knowledge economy. London, UK: Routledge.

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Catholic University of the Sacred Heart, Milan, Italy

    Roberto Moro Visconti

Authors
  1. Roberto Moro Visconti
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Roberto Moro Visconti .

Rights and permissions

Reprints and permissions

Copyright information

© 2020 The Author(s)

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Moro Visconti, R. (2020). The Valuation of Intangible Assets: An Introduction. In: The Valuation of Digital Intangibles. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-36918-7_2

Download citation

  • DOI: https://doi.org/10.1007/978-3-030-36918-7_2

  • Published:

  • Publisher Name: Palgrave Macmillan, Cham

  • Print ISBN: 978-3-030-36917-0

  • Online ISBN: 978-3-030-36918-7

  • eBook Packages: Economics and FinanceEconomics and Finance (R0)

Publish with us

Policies and ethics

Search

Navigation