Research Progress Report

1. 1

2. Objectives of the Study
Stage of Completion
Literature Survey
Paper/Articles Published
Paper/Articles Presented
Workshops and Seminars
Sample Collection
Papers- Work in Progress
Findings
Hypothesis
Plan of Action
2

3. OBJECTIVES OF THE STUDY
(As per the Research Proposal)
3
1

4.  1.To critically evaluate legal provisions and their impact
on the valuation of the intangible assets.
 2.To identify various kinds of intangible assets which
are capable of valuation and disclosures in the financial
statements.
 3.To analyse the basis of valuation of intangible assets
, its accounting treatment and various approaches
involved in it.
4

5.  4.To examine and evaluate various methods of
valuation and techniques adopted in intangible
assets.
 To compute the intangible values based on cost,
time and events of the company.
 To compare the Indian accounting standards
with international accounting standards and
reporting systems in valuation of intangible
assets.
5

6. Stages of Completion:
Pre Phd Completed
Attended Research Methodology Course Work Conducted by JNTU for
7 days
RRM 1- Completed
MBA, Nalla Malla Reddy Engineering college course work completed
and appeared for exam
Certification course on BUSINESS VALUATION & CORPORATE
RESTRUCTURING by CMA
6

7. 7
1.B

8. The New Organizational Wealth
-Karl Erik Sveiby
Knowledge-based organizations with intangible assets, such as accounting
and legal firms, management consultants, advertising agencies, medical
clinics and hospitals, software and engineering companies, and the art
and entertainment industry make up the fastest growing business sector.
Yet few of these companies achieve their potential performance and
profitability because they do not know how to exploit their intangible
assets. They measure performance only in terms of money, ignoring less
tangible but vital assets such as the ability to capture high profile
customers or the creativity to keep the company on the cutting edge with
innovative products or services.
8
1.B.1

9. Corporate Governance in The Information
Technology Sector in India – A Case for Inclusion
of Intangible Reporting
- Dr Rajini
 Intangible value drivers called the “Reporting framework to report
intangible value drivers “ for Indian IT Sector.
 The emerging importance of intangibles as the new value creators
of organizations makes it imperative for companies to make
disclosures on these aspects in their annual reports.
9
1.B.2

10. The New Organizational Wealth shows how some of the
fastest-growing, most profitable companies are discovering
that potentially limitless revenues can flow from their firm's
intangible assets-the ability of employees, customers, and
even suppliers to create new concepts, models, products,
and services. Among the book's many examples is Netscape
Communications. This successful company demonstrates the
profitable results of fostering long-term customer
relationships and the effectiveness of investing in employee
competence to maintain a rich pool of talent.
10
1.B.3

11. Literature Survey Published
Articles
11

12. 12

13. S.NO JOURNAL NAME TITLE OF ARTICLE AUTHOR NAME
1 Business Review Accounting for intangible
assets
NA
2 Emerald Group Publishing Limited The Neglected Intangible Asset:
The Influence of the Trade
Mark on the Rise of the Modern
Corporation
Mira Wilkins
3 Journal of law and financial
management
Intangible assets and creative
impairment - an analysis of
current disclosure practices by
large Australian listed firms
Finch, Nigel
4 International Journal of Management Advertising as an Intangible
Asset and the Value of a
Multinational Corporation
Balas, Ayse N.; Kaya,
Halil D.
5 Journal of Intellectual Capital Importance and contribution of
intangible assets: SME
managers' perceptions
Natasja Steenkamp,
Varsha Kashyap
13
LITERATURE SURVEY 1.C

14. S.NO TITLE OF ARTICLE AUTHOR NAME
6 Reflectionsonintangibleassetspositioningont
heborderofevaluation,auditand
Prof.Ionica Holban
7 On the Nature of Capital: Investment,
Intangible Assets, and the Pecuniary
Magnate
Veblen, Thorstein
8 A study on intangible assets disclosure: An
evidence from Indian companies
Subhash Chander, Vishakh
a Mehra
9 Examining the relation between intangible
assets and technical efficiency in the
international textile and clothing industry
Taylor & Francis
10
Collaboration as an Intangible Asset
Robert J.Thomas
11 The Research on Intangible Assets
Composition and Characteristics of
Enterprises, Universities and Governments
Ling-xiang Jian,Jian-tong
He,Zhong-tuo Wang

15. From web sites
 Intellectual Property Law Issues for Health Care
Providers
 Research and Markets: IP Fundamentals Online
Training
 India escapes US rap on intellectual property
rights issues
 Ahead of Obama visit, US rules out embargo,
lets India off IPR hook
 Legal pitfalls in utilizing intellectual property in
social media
15
1.D

16. 16
C

17. H.T
No
–
1203PH1337
17
C.1
Journal Title of the Article
•Valuation and Disclosure of Intangible assets – Is it
governance challenge or market challenge..? –,
August,2014
New thinking- Intangible asset creation
New possibilities- Valuation of Intangible asset
creation- Regional Conference , July,2014
Ethical values of Intangible assets in financial
disclosures- Principles, Practices and Disclosures
International Conference on Management Challenges,
April,2014 . ISBN NO : 978-163041955-4
One person Intellectual Company – Global Business
Opportunities and Challenges, Osmania University –
International Conference ,June,2014. ISBN 978-81-
910003-0-14

18. H.T
No
–
1203PH1337
18
C.1
Journal Title of the Article
•Valuation of Intangible Assets -Emerging Dimensions in
Business Management , Mahaveer Institute of Science
and Technology Hyderabad ISBN 978-81-924002-2-8
•Reporting of Intangible Asset is a Governing Issue or a
Business Issue -Emerging Dimensions in Business
Management , Mahaveer Institute of Science and
Technology Hyderabad ISBN 978-81-924002-2-8
Creative Market funding – adding value with intangibles
at The Sadhu Vaswani Institute of Management Studies
(SVIMS), Pune , July,2014 Dawn Journal ISSN 2348-0092
Employee Participation, Valuation of Human Resources
and Creation of Intangible Assets in International
Journal of Business Administration Research Review-
IJBARR , Bangalore with ISSN 2348-0653 .E-ISSN-2347-
856X , October,2014

19. 19
Presented
Institution/conference Title
Presented on “Valuation of Tangible and
Intangible Assets”
on 27th April’ 2013
Presented “Innovation in Commerce and
Management – Wealth creation for an Enterprise
through Intangibles “on September 27th,2014
M.E.S Institute of
Management
Presented “Intangible assets in Service sector –
Emerging Business Opportunities & Challenges”
on September 19th ,2014
Presented “Corporate Social Responsibility-
Companies Act,2013” on September 27th,2014

20. 20
C.2
Institution/conference Title
Sri Aurobindo First
Grade College For
Women, Bangalore
Presented “Intangible Assets in Service
Industry- Emerging Business Opportunities &
Challenges” on August 2nd, 2014

21. 21
D

22. 22
Institute Conference Theme
Workshop on Intellectual Property Rights
organised by Jawaharlal Nehru Technological
University in collaboration Andhra Pradesh State
Council of Science and Technology (APCOST) ,
Hyderabad on 26.03.2014 in the faculty of
Management Science
Seminar on Corporate Social Responsibility at
VIVEKANANDA INSTITUTEOF HUMAN
EXCELLENCE on 28th October,2014
Workshop on Corporate Social Responsibility-
Companies Act,2013 at KLS Institute of
Management Education and Research on 27th
September,2014
D1

23. 23

24. 24
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.
Cont…

26. 26
Legal and Business Intangible
Trade mark
Copyright
Patent
Brand
Legal Goodwill
Customer List
Customer Loyalty
In house Intellect
Business

27. Intangible asset is:
☺ Identifiable non monetary asset
☺ Without physical substance
☺ Held for use in production or supply of goods or services
27
Intangible Assets and types of Intangible
Example:
☺ Licenses
☺ Intellectual property rights
☺ Brand names, publishing titles
☺ Computer software
☺ Patents, copy rights
☺ Motion picture licenses
☺ Customers lists
☺ Franchises
☺ Mortgage services rights
☺ Import quotas
☺ Customer supplier relationships
☺ Customer loyalty
☺ Market share and marketing right
☺ Goodwill

28. 28
Types of Intangible Asset

29. CLASSIFICATION
OF INTANGIBLE
ASSETS
Purchased
Intangibles
Internally
created
intangibles
Indefinite life
intangibles
Limited- life
intangibles
29
Classification

30. Sector wise Disclosure
30

31. Sector Intangible Assets Total Assets %
Pharma 22,601 491,163 4.60%
Automotive 182,612 2,424,798 7.53%
Power 42,490 4,106,981 1.03%
Media 11,876 134,902 8.80%
Banking - 26,585,316 0.00%
Telecom 980,636 3,110,090 31.53%
Oil and Gas 367,764 8,014,213 4.59%
Total 1,607,978 44,867,462 3.58%
Disclosure of Intangible Assets in Balance Sheets of 7 Sectors
based on top 5 companies in each sector
31

32. Phar
ma
Auto
motiv
e
Power Media
Banki
ng
Telec
om
Oil
and
Gas
% 4.60% 7.53% 1.03% 8.80% 0.00% 31.53 4.59%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
Intangible as a % of Total Assets
%
32

33. 33

35.  Usually off balance sheet (OBS)
 Source of high competitive advantage
 High value creation potential
 Delay between investments and effects
 High initial development costs (fixed) and
marginal variable costs

36.  The three principal approaches are
 Income/DCF Approach – Present value of the cash flows
arising from ownership and control of the Intangible asset. Also
called the Income Approach
 Cost Approach – How much would it cost to rebuild or
replace the intangible asset in place
 Multiples Approach – How much would similar asset in the
market (Guideline Market/Guideline Transactions) sell in the
market ? Also called the Comparables or Relative Valuation
Approach.
 Apart from the above, modern methodologies of applying ‘Real
Options’ or Contingent Claims approach are used to value
specific Intangible assets such as Patents and Copyrights

37.  Compliance level of the Legal provisions by
Indian Companies in respect of Intangible
Asset Disclosure
 Various valuation methods
 IFRS Comparative study with IAS
37

38.  Examined more than 100 Balance Sheets of
Public , listed and unlisted, and private
Limited Companies
 Workings for the following Companies
@ B5 Corporation Private Limited
@ Visu Inter national Private Limited
@ Tata Business Support services and e-Nxt
Financials for the purpose of merger
@ Indian Rotor craft a tata group company
@ Hindustan Fluorocarbons Limited
38

39. 39

40. 40

41. 41

42. 42

43. Disclosure of Balance Sheet
and Financial Statement
43

44. 44
S.No. Name of the Company Total assets Intagible Assets Percentage Profit Turnover
1NCC LIMITED 91274.67 49.65 0.054% 405.15 62708.32*
2DECCAN POLYPACKS LIMITED 249593287 10464 4.19% -16029094 193552692
3
PALRED TECHNOLOGIES
LIMITED 872292968 1391530 0.159% 1271606895 228339006
4 IKF FINANCE LIMITED 33191.35 25.8 7.77% 1162.72 607348000
5
EMPEE SUGARS AND
CHEMICALS LIMITED 71704.670 0 -5458.46 2812056000
6CAT TECHNOLOGIES LIMITED 838732740 17489911 2.08% -23856600 52945271
7
FRONTIER INFORMATICS
LIMITED 11409423 1342853 11.76% -2515986 434091
8LANCO INDUSTRIES LIMITED 101814.81 75.42 7.40% 3870.03 9966362000
9OIL INDIA LIMITED 34874.45 19.63 5.62% 2981.30 11241340000000
10PENNAR INDUSTRIES LIMITED 58724 1303 2.21% 3074 10781400000
11
PRAJAY ENGINEERS
SYNDICATE LIMITED 114913.37 5.22 4.54% -595.01 87477800,000

45. 45
S.No. Name of the Company Total assets Intagible Assets Percentage Profit Turnover
1GODAVARI DRUGS LIMITED 149509746 7679977 5% 4819914 79847426
2
HINDUSTAN
FLUOROCARBONS 359066000 561000 16% 94.88 4456.05
3ITC LIMITED 340174300000.00 907900000 27% 7418.39 30839.97
4
GTL INFRASTRUCTURE
LIMITED 73389159659 2073474 0% -3708272976 5571685668
5MROTEK LIMITED 671787981 1709342 25% -132022403 500024424
6LANCO INFRATECH LIMITED 508212618000.00 780662000 15%
-
1073294600000.00% 138876563000.00
7
NAVA BHARAT VENTURES
LIMITED 42678069000 64305000 15% 23831.2 118396.47
8NCC LIMITED 8127370000000.00 62810000000 77% 626.66 58508.07
9
PARRYS SUGAR INDUSTRIES
LIMITED 3089168000 3206000 10% -1293.27 10083.65
10
THE ANDHRA SUGARS
LIMITED 11109894000 4629000 4% 7484.92 84573

46. Sample Sheet Analysis
46

47. 47
Sample -2

48. 48

49. S.No PARTICULARS
MOST
LIKELY LIKELY NO IDEA Not Likely No EFFECT
1
Valuation is a good tool for true & fair
view of assets 125 10 8 07
7
Valuation will have greater impact on
stakeholders 112 15 5 5 13
3
The share value of a Company will improve
with
the Valuation of Intangible Assets 58 42 25 10 15
4
Intangible Assets valuation is new source
of funding 43 57 15 10 25
5
Intangible Assets valuation will create
more
business opportunities for Indian citizens 102 25 13 5 5
6
is the valuation of intangible Assets in
terms of money
is geater than the valuation of tangible
assets 95 35 3 4 8
7
The current accounting standards laid
down by
ICAI on Intangible assets is appropriate 82 28 15 12 8
8
The Indian Accounting Standards are
matching with IFRS and International 76 38 6 24 6
49
Sample: 1

50. S.No PARTICULARS
MOST
LIKELY LIKELY NO IDEA Not Likely No EFFECT
9
The International Accounting
Standards is fairly
justified across the globe 6 26 76 20 22
10
Is the value of Intangible
Assets is mandatory to
disclose in B/S or optional? 28 56 32 14 20
11
Is it advisable to disclose
Intangible Assets in B/S
assets portion /notes to
A/C’s. 48 55 17 12 18
12
Does the value disclose effects
the business&
confidentiality of the
Company? 9 56 45 5 35
13
Whether disclosures of
Intangible Assets is on
par with internal accounting
standards? 48 45 27 22 8
14
Wheter intangible Assets was
Properly recognized by
Management 12 45 47 26 20
15
Wheater the significance of
intangible Assets,IPR is
Properly recognized by
employees of your
Organization? 26 76 18 17 15
50

51. S.No PARTICULARS
MOST
LIKELY LIKELY NO IDEA Not Likely No EFFECT
1Valuation is a good tool for true & fair view of assets 58 42 25 10 15
2Valuation will have greater impact on stakeholders 43 57 15 10 25
3
The share value of a Company will improve with
the Valuation of Intangible Assets 102 25 13 5 5
4Intangible Assets valuation is new source of funding 95 35 3 4 8
5
Intangible Assets valuation will create more
business opportunities for Indian citizens 82 28 15 12 8
6
is the valuation of intangible Assets in terms of money
is geater than the valuation of tangible assets 76 38 6 24 6
7
The current accounting standards laid down by
ICAI on Intangible assets is appropriate 6 26 76 20 22
8
The Indian Accounting Standards are
matching with IFRS and International 28 56 32 14 20
51

52. S.No PARTICULARS
MOST
LIKELY LIKELY NO IDEA Not Likely No EFFECT
9
The International Accounting Standards is fairly
justified across the globe 43 57 15 10 25
10
Is the value of Intangible Assets is mandatory to
disclose in B/S or optional? 125 10 8 07
11
Is it advisable to disclose Intangible Assets in B/S
assets portion /notes to A/C’s. 112 15 5 5 13
12
Does the value disclose effects the business&
confidentiality of the Company? 43 57 15 10 25
13
Whether disclosures of Intangible Assets is on
par with internal accounting standards? 102 25 13 5 5
14
Wheter intangible Assets was Properly recognized by
Management 6 26 76 20 22
15
Wheater the significance of intangible Assets,IPR is
Properly recognized by employees of your
Organization? 28 56 32 14 20
52

53. S.No
Categeroy Name
No. Of Samples Familiar Non-Familiar
1Indusrial Representaive 2
2Professionals: 11
3investors 14
4Corporate Repersentive 9
Total 36
53

54. 54
HYPOTHESIS
J

55.  The disclosure of intangible assets in
financial statements of the company Does not
Impact the stakeholders interest and value
 The disclosure and valuation of intangible
assets in Indian companies are not adequate
and appropriate
 There is no gap in disclosure , valuation of
Intangible assets between Indian accounting
standards and International Financial
Reporting Standards
55

56.  Investors strongly believe that Intangible assets disclosure is
not proper and adequate
 Professionals are in the process of learning the various
methods of valuation for identifying, recognising the
Intangible assets
 Disclosure of Intangible assets in the Financial statements are
not proper and methodology is not specified in Accounting
standards
 Convergence of IFRS is in process
 Awareness among Indian corporate entities is required to
disclose the true value of Intangible assets in their financial
statements
 Regulators are advising and guiding the companies to
comply with all the Accounting Standards
56

57. FUTURE PLAN OF ACTION
57

58.  More Paper presentations at International/
national seminars
 Attending seminars at national/ international
level
 Detailed study on IFR
 Collecting more Samples
 Thesis preparation
58
K

59. 59
K
THANK YOU