Measuring intangible assets—A review of the state of the art

Abstract

This paper presents an overview of the state of the art in the field surrounding the measurement of “intangibles” for productivity analysis. The purpose of the paper is to inform indicator development and implementation in economic analysis, both at the micro and aggregated levels. The review seeks to capture the development of intangibles measurement, which has explored a variety of directions, both in terms of definition, method and data. We characterize both the diversity of the field and its development over time. Current national and firm level accounting rules lead, from an economic viewpoint on intangibles, to both an underestimation of intangible assets and productivity growth. Further work is needed, both concerning the estimation of “technical” aspects such as depreciation rates and deflators, and in the continued testing and comparison of different measurement efforts. Many opportunities exist to aggregate across or cross‐validate between the measures that are currently being used, enhancing our understanding of the properties of these measures. Even though micro‐based work faces great challenges in terms of data availability, it will be important for the estimation of depreciation rates and in developing our understanding (and thereby better measurement) of broader forms of intangibles, which can thereafter inform measurement at more aggregated levels.

Intangibles, Intellectual Capital, and the Performance of Listed Non-Financial Services Firms in West Africa: A Cross-Country Analysis

“…There are varied efforts to measure intangible values. Van Criekingen et al [9] identified six different approaches to measuring intangible assets, which include the Corrado et al [8] expenditures-based approach, the survey-based measurement of expenditures approach, the measurement based on firm balance sheet data, occupation or task-based approach, intellectual property rights-based measures and market valuation approach. The expenditures-based approach of Corrado et al, [8] provides a macroeconomic framework that measures intangible assets.…”

“…The expenditures-based approach of Corrado et al, [8] provides a macroeconomic framework that measures intangible assets. They categorized the intangible assets into three groups, namely, economic competencies, innovative property and computerized information [9,26]. The second is the survey-based measurement of expenditures with the aim to use survey instruments to measure the investments in intangibles.…”

“…Various studies have attempted to capture intellectual capital with different models having been developed, which are categorized under six approaches, namely, the Corrado et al [8] expenditures-based approach, the survey-based measurement of expenditures approach, the measurement based on firm balance sheet data, occupation or taskbased approach, intellectual property rights-based measures and market valuation approach [9]. The need to do these sorts of exercises is because, if it cannot be measured, then it cannot be managed, and the relevance or otherwise in the corporate strategic efforts will be downplayed.…”

“…Moreover, there are increasing investments in intangible assets that continue to increase in value. The accounting standards developed by the International Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) failed to capture these things, but some researchers have developed alternative models to help in drawing insights after examining the role intangibles play in driving corporate profitability, efficiency, financial stability, productivity, and the strategic stance they take [9].…”

“…The quest to link intangibles or intellectual capital to corporate financial performance is not a new area of interest. Several review articles have explored the different studies conducted on intellectual capital, but what is so clear is the inconclusiveness of the findings, which beg for further studies to provide an eclectic understanding of the issues [9,[12][13][14][15][16][17][18]. For instance, many studies have been conducted on developed economies, such as countries in the European Union and North America, for instance.…”