Studies On Evaluation Methods Of Intangible Assets

The ages of the knowledge-based economy, the intangible assets are exertive to the existence and developments of the business enterprise. In many famous companies, their intangible assets value is far larger than the value of their tangible assets. The intangible assets of high quality can bring huge economic benefits for the business enterprise and make business enterprise more competitive. For example, Coca-Cola company depending on the unpatented technology surpassed all the other enterprises in competition for hundreds years. The Microsoft depending on the patent technology became the biggest and strongest enterprise in the world in only a decade or two. Our country falls behind because of the technique economy and the knowledge shortage of the importance of the immaterial assets .We not only can not grow the famous brand of ourselves in newly arisen realm, but also lose many brands and techniques. This is one of the important reasons that our business enterprises lack the competition ability. In order to raise the competition ability, we must pay more attention to the intangible assets, strengthen the management of the intangible assets and produce the property right fluxion. However, the traditional intangible assets valuation methods have already become an important factor for intangible assets evaluation. Along with our reform, especially after joining the WTO, the socialism market economy will melt into the big tide of the world economy. Studying the valuation methods of the intangible assets has important theories and realistic meanings. Due to the immateriality of the intangibles, the obscurity of their expense and the uncertainty of their profit, the research on the intangible assets is more difficult, more complex than that of the tangibles. This paper makes use of both the qualitative analysis and the quantitative analysis and applies economics, mathematics, management and so on to thoroughly investigate the value theory and valuation methods about the intangible assets. This paper consists of four sections. Section 1: The features and evaluation methods of intangible assets. In this section, I mainly analyze the definition of the intangible assets which refer to any economic resources that are controlled by some specific subjects, lack physical existence and have the ability to get above quota profit. Furthermore, this section also classifies the intangibles systematically and shows clearly some familiar forms of the intangibles. Point out the intangible as a special asset has many differences from tangible assets. This section also investigates systematically the measures to value intangible assets. There exist three basic methods to value intangible, replacement cost method, current market price method and present income value method. At the last part of the section, I contrast the cost method and the income method and further to address that we should choose the applicable method under the different asset valuation purpose. Section 2: The fuzzy synthetic valuation method of technology-related intangibles. First this section introduces several familiar kinds of intangible valuation measure methods. Then summarizes and analyzes the existing valuation method of patent right according to cost and income. In terms of cost, I mainly discuss cost method and cost plus method, In light of income, I emphasize income present value method, LSLP, RR, cost-income method and so on. Finally, this section analyzes the characteristics of the patent technology and its valuation, and then establishes valuation index system for technology-related commodities. On the base of it, I make the further valuation of technology-related intangible applying the fuzzy synthetic valuation method. It reflects the relevant factors that inflect the technology-related intangible valuation more comprehensively. Therefore the valuation outcome is more comprehensive and more reasonable. Section 3: Two valuation methods for goodwill and their equivalence property. In this section I deliberate on the characteristic of goodwill. As an indefinite intangible, goodwill refers to an ability an enterprise possesses to obtain more above quota income than normal investment under the same basis. It is also an intangible asset an enterprise has not or can not value alone, that determine to apply the entirely asset valuation method. Then I introduce the difference between the trademark and goodwill. There are two valuation methods, above quota income reduction method and residual method. The above quota income reduction method bases on the fact that goodwill is the ability an enterprise gains above quota income. The substance of the valuation method is capitalizing the above quota income and it is the present income value method actually. The residual method compares the valuation of an enterprise'whole income and the sum of the individual asset, their remainder is the goodwill's value. I have manifest that the two methods are of equal value under certain circumstance. They recognize and support each other. That makes the result more scientific and more effective. Section 4: The application of options pricing theory to the realm of intangible assets evaluation. At the beginning of this section, the concepts and features of option are discussed. The option gives the holder the right to buy...