Intangibles: Management, Measurement, and Reporting

by Baruch Lev

Book Overview

"

This book is the first comprehensive, scientifically based study of the nature and impact of intangibles. Weaving case studies and real-world examples with contemporary business theory, Baruch Lev - establishes an economic framework to analyze managerial and investment issues concerning intangibles; - surveys the impact of intangibles on corporate performance and market values, including management difficulties, risk, questions of property rights,...

• Format: Paperback
• Language: English
• ISBN: 0815700938
• ISBN13: 9780815700937
• Release Date: June 2001
• Publisher: Globe Pequot Publishing Group Inc/Bloomsbury
• Length: 228 Pages
• Weight: 0.75 lbs.
• Dimensions: 0.6" x 6.0" x 9.2"

Customer Reviews

Concise analysis of intangible management

The discipline of intangible management (knowledge management) has been around for decades; there have been many attempts in better understanding & management of intangible assets, with different perspective (organizational learning, technology, strategy etc). Lev has provided a very concise analysis of intangible management with an economics perspective. His analysis is very systematic, robust, with support of empirical studies; his treatment of the subject is coherent & enjoyable to read. But I find the recommendation part of the book slightly weak; the 'value chain scorecard' does not provide significant enhancement over Kaplan & Norton's balanced scorecard.

Making the Invisible Visible

The topic of intangible assets is one of the most vexing issues facing corporations, investors and policymakers today. Professor Lev's book is an important contribution to the literature on intangible assets. The author is well-informed on the inadequacies of current accounting practices and his prescriptions for dealing with the problems are extremely insightful. What makes this book special is the author's obvious passion and enthusiasm for his subject. This book deserves more than five stars.

An educational must for the smart businessperson

This book makes a huge contribution to the intellectual and practical tool-kit of the smart businessperson. Smart businesspeople sense that intangibles can be the key to creating huge value in the New Economy. What Baruch Lev does so persuasively in his book is to clarify that general sense into sharp knowledge.Intangibles have very different business attributes than do tangible investments in land, buildings, machinery, and the like. Baruch clearly and cleanly lays out the economic issues involved and summarizes the relevant evidence from a variety of business disciplines (a significant portion of which is from his own highly innovative research and real-world consulting experience).The book is particularly accessible to anyone who has MBA. I've used the book successfully in my own teaching on the New Economy, and strongly recommend it to anyone interested in learning key insights about today's business environment.

Excellent Overall - weak in Human Capital

Overall, Lev has created a landmark review of the state-of-the science in Intangible Asset Valuation. I haven't found a better book on this very new area, particularly from an Academic Finance point of view.My main quibble is with his lite treatment of human resource drivers of value. In making his conclusion, he places more weight on a working paper than he does on two peer-reviewed papers in good journals showing relationships between high-end HR practices and shareholder value.Lev suggests nicely, though, how value gets created, and specific metrics (with empirical support) that are helpful in each part of the value chain. Rather than citing Kaplan & Norton, he creates his own "Value Chain Scoreboard". If he informed his approach with new ideas from Organizational Psychology (e.g. John Bodureau), Industrial Engineering and Marketing, and this would be 5 stars. Overall, I like Jeanne DiFrancesco's (ProOrbis) ideas better for more concrete application of intangible value creation, measurement and optimal asset mix.

Thoughtful Treatment of a Tremendous Problem

There is no larger controversy in accounting or investment circles today than the treatment of intangible assets. Economists and investment analysts may debate what is new about the "New Economy", but one thing remains clear, intangible assets are assuming a critical role in the creation of wealth.Non-physical sources of value, intangible assets are generated by innovation, unique organizations and human resource practices. This asset class often interacts with tangible and financial assets to create shareholder value and stimulate economic growth. Yet they remain conspicuously absent from required disclosures.Baruch Lev argues in this book that his lack of public information results in improved management of corporate assets contributes to a higher cost of capital and affords abnormally large gains to insiders at the expense of outside investors. To level the playing field, Lev proposes companies periodically release, in addition to the required income, balance sheet and cash flow statements, quantitative and standardized information most relevant to the company value chain or business model.Specifically, he would require three classes of timely disclosure on what he calls the innovative and successful company's lifeline: Discovery and Learning, Implementation and Commercialization. Under Discovery and Learning, he would require disclosure of internal renewal, acquired capabilities and networks. For Implementation, required disclosures would include intellectual property, technological feasibility and Internet metrics. For Commercialization, required disclosures would include data on customers, performance and growth prospects.These disclosures will transform the accounting profession from one that is essentially backward looking - how much was sold at what cost - to a forward looking - the creation of value enhancing assets. This recognizes that in the current knowledge-based economy, value creation or destruction precedes transactions, often by years.Lev's proposed disclosures would compliment current disclosures, providing a reality check on the system of value creation or destruction as products, services and processes move along the value chain.