Intangible Asset Market Value Study
Within the last quarter century, intellectual capital has emerged as the leading asset class. The term “intellectual capital” refers generally to traditional Intellectual Property assets – patents, trademarks and copyrights. At Ocean Tomo, we uniquely include within the definition of “intellectual capital” special client intangible assets, especially corporate and government preference rights.
Recent and anticipated changes in accounting rules and securities reporting will further the recognition of intangible assets. The growth in the value of Intellectual Capital Equity® can be seen when evaluating the market capitalization of the S&P 500 as shown in the chart below.
For reprint permission, please email Info@OceanTomo.com.
Ocean Tomo has released an update to the Annual Study of Intangible Asset Market Value (IAMV). The study examines the component of market value, specifically the role of intangible assets across a range of global indexes.
While emphasis is often of technology-driven intangible assets such as patents and trade secrets, brand value is also an important component of IAMV. This year for the first time we compare IAMV calculations to Interbrand’s Best Global Brands 2016 calculation of brand value. Comparing the 39 companies appearing on both the S&P 500 and the Interbrand list suggests brand value may represent roughly one quarter or more of average IAMV.
Also for the first time, we have expanded our IAMV study beyond the S&P 500 to explore the components of value in several key international markets. Stock market indexes from Europe, China, Japan and South Korea were selected and analyzed to determine the comparable role of intangible assets.
The CSI 300 is a capitalization-weighted stock market index designed to replicate the performance of top 300 stocks traded in the Shanghai and Shenzhen stock exchanges. As the Index aims to reflect the overall performance of the China A-share market, it serves as a useful comparative barometer.
Beginning in 2009, there is a downward trend in intangible asset value through 2013. Ocean Tomo notes that this coincides with slowing growth rate of China’s GDP that began in 2010, ending China’s three- decade long streak of double-digit GDP growth.[+]
Throughout 2019 we will expand our IAMV study to explore the components of value in several key international markets. Stock market indexes from Europe, Japan and South Korea will be selected and analyzed to determine the comparable role of intangible assets.
*Burk, Kathleen, “Morgan Grenfell 1838-1988: The Biography of a Merchant Bank”, Oxford University Press, 1989, p. 5.
**Ibid., p. 98.
***Merchant Banking: Past and Present, by Valentine V. Craig. Valentine V. Craig is a Chartered Financial Analyst in the FDIC’s Division of Research and Statistics.
[+] “How slow will China’s economic growth go?,” The Japan Times, July 21, 2016 (accessed: http://www.japantimes. co.jp/opinion/2016/07/21/commentary/world-commentary/slow-will-chinas-economic-growth-go/#.WEWZ47IrKUk)