ANJUMAN - I – ISLAM’SALLANA INSTITUTE OF MANAGEMENT STUDIES
Project on Analyze of Financial Statement ON INTANGIBLE ASSETS SUBMITTED TO:-PROF. T.M.C.VARADARAJAN
Team Members:- Arshi Ansari – 1 Yusuf Bhanpurwala – 10 Almas Syed – 56 Altaf Surya - 55
Intangible – Intensive CompaniesMeaning:-The terms knowledge assets, intellectual capital, and intangible assets are used interchangeably. Economists call them as knowledge assets, management experts refers to them as intellectual capital, and accountants call them as intangible assets or simply intangible.
Characteristics of Intangible assets1. Non-Rivalry2. Hazy Property rights3. Investment is risky4. No organized & competitive market5. Value accounted by the future growth value6. Difficult to figure out real worth
BrandsDefinitions:-Brands enable consumer to identify products or services which promises specific benefits. They arouse expectations in the minds of customer about quality, price, purpose and performance.
Publishing Rights Meaning:-These are rights for commercial exploiting creative and knowledge based material. From a legal point of view, the principal publishing rights are Copy Rights (Books, Article, Photograph, Illustration and so on), Trademarks (title of magazines, books and so on), Get-ups (formats, appearance, and so on).
Intellectual Property Meaning:-Intellectual property usually covers patents, trade mark, register designs and copyrights. The owner of an intellectual property is legally protected against its unauthorized use.
CopyRights Is a set of exclusive rights granted to the author or creator of an original work, including the right to copy distribute and adapt the work.
Licenses Licenses is an agreement through which a licenser assign certain rights to a licensee in return for a consideration.
(AS) 26 - Intangible AssetsDefinition:- An intangible asset is an identifiable non-monetary asset, without physical substance, held for use in the production or supply of goods or services, for rental to others, or for administrative purposes. An asset is a resource:(a) controlled by an enterprise as a result of past events; and(b) from which future economic benefits are expected to flow to the enterprise.
Measurement Subsequent to InitialRecognition Amortisation Internally Generated Goodwill Internally Generated Intangible Assets Recognition of an Expense
Recognition and Initial Measurement of an IntangibleAsset (a) definition of an intangible asset (b) the cost of the asset can be measured reliably (c) it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise; and (d) An intangible asset should be measured initially at cost
Implication for Financial Management Organization and Innovation Strategic Management of Intangibles Intangible Assets as a Source of Competitive Advantage Managing Intellectual Capital Protecting Intellectual Capital
Balance Sheet as on 30th April, 2005 Liabilities Amount Amount Assets Amount AmountSOURCES OF FUNDS FIXED ASSETSCapital a/c XXXX Goodwill XXXX(Add)Net Profit XXXX Patents XXXX XXXX XXXX Copyrights XXXX(Less)Drawings XXXX XXXX Trade Mark XXXX XXXX Building XXXXRESERVES AND SURPLUS Machinery INVESTMENTSLOANS CURRENT ASSETSLoan from Bablu a/c Cash a/c XXXX Bank a/c XXXX Closing Stock a/c XXXXCURRENT LIABILITIES Sundry Debtors XXXXCreditors XXXX Arial & Co. a/c XXXXUsha & Co a/c XXXX XXXX Wheel & Co. a/c XXXX XXXXBank Overdraft a/c XXXX MISCELLANEOUS EXPENSES Profit and Loss a/c XXXX XXXX XXXX
Approaches to valuing Intangible Assets Three approaches to valuing an intangible assets:-1. Cost Approach2. Market Approach3. Economic Approach
The economic Approach of valuationTwo types:-1. Estimate the cash flow/earningsDirect Identification methodBrand contribution method2. Capitalize the cash flow/earningsDiscounted cash flow methodEarnings multiple method