The Value Relevance Of Intangible Assets

With the improvement of technology, the percentage of product and physical capital is decreasing, while the percentage of knowledge and information is increasing. Knowledge capital and intangible assets take the more important role in the modern society. When technological innovation is going rapidly, intangible assets take up larger part of firm assets in China. Quality and quantity of intangible assets gradually becomes the important sign of company core competitive ability.Domestic scholars have got some achievement of study on intangible assets. However, argumentation about intangible assets is underway and limited. Most of literatures didn't take into account that industry can influence the value of intangible assets, and it is not reasonable to test the intangible assets'influence on accounting earnings and value relevance of accounting information by considering intangible assets as a whole. There is little empirical research to differentiate all kinds of intangible assets.There is great difference of capital structure in different industries; firms in different industries have different demands on intangible assets, and different intangible assets make the different contribution to firm development. Therefore, it is useful to analyze the value relevance of intangible assets according to industries, for example, the contribution of intangible assets made to operating performance of firms, the use of intangible assets which listed companies disclosed for investors. Furthermore, it is meaningful to study the difference of relevance in the different kinds of intangible assets.Our samples are information technology listed companies that stand for knowledge economy and 3rd technology revolution. This paper studies that intangible assets'influence on accounting earnings and accounting information value from 2004 to 2006. This article tries to select the new sample data according to industries, collect category information of intangible assets and conduct more credible research on the value relevance of intangible assets, in order to make the contribution on exploring the theory of the value relevance of intangible assets.As result:(1) The influence of intangible assets on profit comes from technical intangible assets and other intangible assets, it is very strange that other intangible assets has positive effect on firm profit, but technical intangible assets has negative effect on firm profit. This is conflicting to our hypothesis, even the opposite result.(2) Statistics regression analysis on increment of all kinds of intangible assets shows that technical and other intangible assets have negative effect on firm profit, and rights- intangible-assets intangible assets have positive effect on firm profit, but these effects are all not significant.(3) Empirical research on stock-price model supported the hypothesis 2nd,it is found that each share of technical intangible assets have significant positive effect on stock price, but each share of other technical intangible assets have no effect on stock price. This result can be explained from several reasons, such as defect of accounting system , distortion of statement information, structure of intangible assets is not reasonable, intangible assets classifying standard is not reasonable, data collection problem.(4) Credible test on Tobin-Q show that either deposit or increment of intangible assets have no significant influence on Tobin-Q, hypothesis 3rd and 4th are not supported, the test on Tobin-Q didn't show that all kinds of intangible assets increase or decrease the firm value.Empirical research result is not agreed with the domestic literatures before, so it is essential to analyze intangible assets from industry and intangible assets classifying.The study on intangible assets will differentiate the industry and intangible assets to assure the research creditability...