Nowaday, with advent of the knowledge and information-based society, the intangible assets is given much weight in the factors of a firm value and then the necessity on the evaluation and valuation of intangible assets is increased. Because of that, t...
Nowaday, with advent of the knowledge and information-based society, the intangible assets is given much weight in the factors of a firm value and then the necessity on the evaluation and valuation of intangible assets is increased. Because of that, that study on the evaluation and valuation of intangible assets have actively been made progress.
The researches by Gu and Lev, Smith and Parr, Smith and Sullivan are representative of the evaluation of the intangible assets by the unit of currency. This study evaluates brand asset-driven earnings, one of the intangible-driven earings, using the basis of Gu and Lev's model which modifies and supplements at the purpose of this study.
This study is to classify the decisive factors of a firm value into the operating assets and non operating assets and the intangible assets, and to evaluate intangible assets. This study suggested relevance between the intangible-driven earnings and the decisive factors of the intangible assets. And then the decisive factors of the intangible assets were classified into the brand assets, the human assets and the process assets. The proxy of the process assets was the expenses of research and development; That of the human assets was the expenses of education and training; That of the brand assets was the expenses of advertisement.
The Simon and Sullivan Model uses advertising cost, the age of the firm, order of market entry, and the advertising costs spent by competitor as variables for brand assets. However, this study uses advertising cost as proxy for the brand assets.
The intangible asset-driven earnings by the evaluation model of this study is calculated by abstracting the contribution earnings of the operating assets and non operating assets from total firm's profit and the brand asset-driven earnings is calculated by proportional allotment intangibles-driven earnings among the brand assets, the human assets and the process assets.
To achieve this purpose, this paper established the study model and its hypotheses, for the empirical analysis, this study collected the sample on the listing Pharmaceutical firms from 2005 to 2007. To select the sample firms for evidence, this paper set a criterion of the selection. As a result of that, the final selected firms are 31 firms. This study sample used actual data(financial statements) of the pharmaceutical firms through on and offline from DART(Data Analysis Retrieval and Transfer) system of Financial Supervisory Service.
As the results of this study, this paper suggests that the brand asset-driven earnings by this study's model have a good usefulness to a valuation basis of the profits in legal advice against trespass of trademark or intellectual assets.