Valuation of Intangible Assets In Indian Companies In International Financial Reporting Standards(IFRS) Scenario- An Empirical Study

1. Jawaharlal Nehru Technological University
Hyderabad
By
1

2. OBJECTIVES OF THE STUDY
(As per the Research Proposal)
2
1

3.  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.
3

4.  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.
4

5. 5

6. 6
S.NO Particulars Number Details
1 Books Referred 1 The New
Organizational
Wealth.
Karl Erik Sveiby
2 Thesis Referred 1 Corporate
Governance in The
Information
Technology Sector
in India – A Case for
Inclusion of
Intangible
Reporting
- Dr
Rajini
3 Papers Referred 125 Relating to
Intangible
Assets,Valuation,
IFRS.

7. 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.
7

8. 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.
8
1.B.2

9. 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.
9
1.B.3

10. Literature Survey Published
Articles
10

11. 11

12. 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
12
LITERATURE SURVEY 1.C

13. 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

14. 14

15. 15
S.N CONFERENCE DETAILS ARTICLE TITLED STATUS FINDINGS
1 35TH WORLD MANAGEMENT
CONGRESS, PUNE- DEC 28TH 29TH 2014
EMERGING TRENDS IN
STUDIES, TRAINING ,
RESEARCH AND
CONSULTANCY IN AREAS OF
VALUATION OF INTANGIBLE
ASSETS
PAPER PRESENTED WITH ISSN :
2277-9310
In this ever changing world
of technological
advancement, there arises a
need to undertake more in-
depth studies, training,
research and consultancy in
areas of valuation of
Intangible assets as they
are more crucial in any
Organization
2 ICBF 2015 INTERNATIONAL
CONFERENCE,HYDERABAD- JAN 8-9TH
2015
TRUE VALUATION AND
PROPER DISCLOSURE OF
INTANGIBLE ASSETS-TOOL
FOR ACHIEVING SUSTAINABLE
FINANCE
GIVEN CERTIFICATE Presence of Intangible assets
in the Balance Sheet of a
company needs to be
properly evaluated and
reported in case of mergers
of two potential companies,
liquidation which is carried
out in distressed conditions
of sale of Intellectual
Property viz., licenses,
franchisees, patents,
copyrights , trademarks and
so on even in winding up
situation on completion of a
desired project execution.

16. 3
SYMBIOSIS- SCMS INTERNATIONAL
CONFERENCE ,PUNE-23,24TH
FEB,2015
VALUATION AND
DISCLOSURE OF INTANGIBLE
ASSETS – A TOOL OF RISK
MANAGEMENT
GIVEN CERTIFICATE AND
ARTICLE PUBLISHED WITH
ISBN No. 978-1-63415-
553-3 PAGE NO 532.
With regard to the valuation
and disclosure of Intangible
assets acting as a tool for risk
management, the companies
have to ensure the localization
of the systemic and inherent
risks of the business that most
affect the value and results of
the company, measurement of
the sensibility of the value and
results to the identified risk
sources defining the risk
reduction strategy, considering
the binomial risk-return,
introduction of exposure and
monitoring metrics for risks,
such as Value at Risk.
16
4 SNMV NATIONAL CONFERENCE AT
COIMBATORE ON JAN 9TH,2015
SOCIAL MEDIA - CREATING
VALUES AND MEASURING
WEALTH IN TERMS
OF INTANGIBLE ASSETS
ARTICLE ABSTRACT
PUBLISHED AND GIVEN
CERTIFICATE
The social media is a
tool for the betterment
of the society and in
the same way as the
success source of
finance for
Organizations. For any
Enterprise the
Organizational “values”
need to be maintained
through social media .

17. 17
5 WCC INTERNATIONAL CONFERENCE AT
CHENNAI ON FEB 16, 17TH 2015
WEB BASED BUSINESS
OPPORTUNITIES – CREATION
OF INTANGIBLE ASSETS
GIVEN CERTIFICATE ARTICLE
PUBLISHED WITH ISBN ---
Web based Business
Opportunities are available and
the companies need to identify
the intangibles and leverage
them for increasing the share
value of the firm.
6 VIDYAWARTA JOURNAL CONVERGENCE OF INDIAN
ACCOUNTING STANDARDS
WITH IFRS- EMPHASIS ON
INTANGIBLE ASSETS.
ARTICLE PUBLISHED WITH ISSN
2319 9318. ISSUE NO 9
VOLUME NO .1
IFRS conversion projests take
more time and resources than
anticipated. conversion brings a
one-time opportunity to
comprehensively reassess
financial reporting and take a
clean sheet of paper approach
to financial policies.
7 SAMARAOH-2015, SIVA SIVANI
INSTITUTE OF MANAGEMENT ,
HYDERABAD INTERNATIONAL
CONFERENCE ON FEB 11-12, 2015
VALUATION OF INTANGIBLE
ASSETS IN NEW FINANCIAL
PERSPECTIVES
CERTIFICATE
GIVEN, ARTICLE PUBLICATION
COPY WITH ISBN 978-81-
8424-974-3
Intangible assets are
considered crucial and
significant which are emerging
as a new tool for various
aspects in financial field. it
enables new source of funding
and leading to growth of
enterprises
8 WORLD EMPOWERMENT AND
SUSTAINABILITY CONGRESS, GOA ON
JAN 24TH organized by Confederation of
Indian universities in association with
INAAR(International Association of
Academicians and Researchers) and
Indo Global Chamber of Commerce ,
Industries and Agriculture- IGCCIA
INTERNATIONAL
RELATIONSHIPS IN FINANCIAL
STATEMENTS-REPORTING
THROUGH INTANGIBLE ASSETS
GIVEN CERTIFICATE AND
ARTICLE PUBLISHED WITH ISSN :
2348-1641.
RBI’s instruction to banks is the
principle of lending to and on
the back of all intangible and
knowledge assets. By
permitting banks to finance
investments in an intangible
asset such as spectrum and
seeking bank’s recourse to it in
the event of a default, RBI had
moved forward on intangible
asset financing

18. 18
9 INTERNATIONAL CONFERENCE ON
IMPLICATIONS OF IFRS FOR
CORPORATE REPORTING PRACTICES
, OSMANIA UNIVERSITY,
HYDERABAD ON MARCH 13-15TH
2015
INTANGIBLE ASSETS -
IMPLICATIONS OF IFRS FOR
CORPORATE REPORTING
PRACTICES
ARTICLE PUBLISHED WITH
ISSN 00973-5372
There are differences in
identifying Intangible
Assets between Indian
Accounting standard and
IFRS standard, in respect of
the disclosure and
treatment of expenditure
relating to Intangible
assets.
10 NATIONAL SEMINAR ON THE NEW
INDUSTRIAL POLICY OF
TELANGANA STATE,2014: A
CRITICAL LOOK ON 30-31ST JAN ,
2015
INDUSTRIAL POTENTIALITIES
IN TELANGANA –POLICY
PERSPECTIVE AND ROLE OF
IPRS IN ENTERPRENEURSHIP
DEVELOPMENT IN
TELANGANA
GIVEN CERTIFICATE OF
PAPER PRESENTATION
District wise industrial
potentialities of Telangana
are analysed based on the
census data collected from
government sources. It
brought out the unique
features of each district and
gave scope to frame a
unique industrial policy to
tap the differing talents of
people of Telangana
thereby “Bangaru
Telangana” can be formed.
11 NATIONAL CONFERENCE ON
INDIAN COMPANIES ACT, 2013 AT
FTAPCCI, HYDERABAD ON
FEBRUARY 7TH,2015
Chaired the sessions
relating to the financial
statements and analysis .
The changes in balance
sheet as per the new act
and other companies
financial statements were
analysed .

19. 19
12 Kshethra Engineering college, Armoor,
Nizamabad National
Conference on “Innovative
Management Strategies for
Sustainable Development in Global
Perspective”
DOES THE CONVERGENCE OF
INDIAN ACCOUNTING
STANDARDS WITH IFRS PAVES
THE WAY FOR THE CREATION
AND GROWTH OF INTANGIBLE
ASSETS IN GLOBAL
PERSPECTIVE" UNDER THE
THEME ACCOUNTING AND
FINANCE
Received paper presentation
certificate and awarded as best
paper at conference
Some Companies are
charging the expenditure of
Intangible assets to the
unrelated accounting heads,
Intangibles in the process of
capitalization as revenue
expenditure. At the same
time there is a reverse
treatment to this procedure,
related expenditure showing
as deduction in order to gain
Income tax exemption in the
relevant sections, instead of
Capitalization as asset. The
Indian companies and the
Industry are not inclining to
disclose totally Intangible
Assets in their financial
statements for the various
reasons viz confidentiality,
secrecy or to avail tax
deduction

20. 20
13 ICSI Chartered Secretary
MONTHLY JOURNAL
IS SECRETARIAL STANDARD
ONE MORE LAW BURDE
NING THE INDUSTRY AND
PROFESSIONALS?
PUBLISHED IN JANUARY
2015 EDITION WITH ISSN
0972-1983
Secretarial standards
act as an aid to the
professionals for
discharging corporate
responsibilities and for
the development of
corporate legal
practices thereby
increasing the
involvement and
participation of the
Directors and members
of a company on the
whole.
14 NATCON E-BUSINESS NATIONAL
CONFERENCE ORGANIZED BY
LUTHRA INSTITUTE OF
MANAGEMENT
ON FEB 21ST, 2015
AN INTANGIBLE AND
INTELLECTUAL WAY OF E-
BUSINESS ADAPTION AND
IMPACT ON BUSINESS
PERFORMANCE
GIVEN CERTIFICATE AND
ARTICLE PUBLISHED WITH
ISBN 978-93-8483-305-
3
In the age of e-business
there is a need to adapt a
comprehensive strategy
with pool of intellectual
thoughts by recognizing
scope of intangible assets

21. 21
15 IRJCBSS- INTERNATIONAL
RESEARCH JOURNAL OF
COMMERCE, BUSINESS AND
SOCIAL SCIENCES
EMERGING TRENDS IN
STUDIES , TRAINING ,
RESEARCH AND
CONSULTANCY IN AREAS
OF VALUATION OF
INTANGIBLE ASSETS
PUBLISHED IN VOLUME
3, ISSUE
9,DECEMBER,2014
EDITION
there is a need to
undertake more indepth
studies,training,
research and
consultancy in areas of
valuation
of intangible assets as
they are more crucial in
any organization and
certainly contribute
with an ultimate
objective of industrial
growth,enabling many
companies to increase
and strengthen their
presence .
16 ICSI CHARTERED SECRETARY SECRETARIAL ,
STANDARDS: ADDING
VALUE TO LAW
VOLUME: XLV NO: 5,
MAY,2015 EDITION ,
PAGE NO 30 TO 38.
Companies are not to be
seen as an isolated
entity , but as a part of
interconnected chain of
various stakeholders.
There is a need of
universally acceptable
governance standard to
be followed by each
organization or firm.

22. 22
C.1
Journal Title of the Article
Convergence of Indian Accounting standards with
IFRS-Emphasis on Intangible Assets.
ISSN NO: 2319 9318
Issue no 1
Volume no 1
International Relationships in Financial statements-
Reporting through Intangible assets.
Jan 2015
ISSN NO: 2348-1641
Emerging Trends in Studies , Training , Research and
Consultancy in areas of valuation of Intangible assets
Dec 2014
ISSN NO: 2277-9310

23. H.T
No
–
1203PH1337
23
C.1
Journal Title of the Article
Emerging Trends in the Global Financial Landscape
approaches , Challenges and Oppurtunities .
SCMS ,Pune, Feb , 2015.
ISBN NO: 978-1-63415
553-3 Page no 532
Intangible Assets- Implications of IFRS for Corporate
Reporting Practices.
Osmania University , March 2015
ISSN NO: 00973-5372

24. H.T
No
–
1203PH1337
24
Presented
s Title
Social Media-Creating values and Measuring
Wealth in terms Of Intangible Assets.
Coimbatore , 2015 ,
Industrial Potentialities in Telangana-Policy
Perspective and Role of IPRS in
Enterprenuership Development in Telangana
JAN , 2015.
National conference on INDIAN Companies
Act.
FEB 2015 ,
Does the Convergence Of INDIAN Accounting
Standards with IFRS Paves the way for the
Creation and Growth of Intangible Assets in
Global Perspective under the theme
Accounting and Finance

25. 25
C.2
True Valuation and Proper Disclosure of
Intangible Assets-Tools for Achieving
Sustainable Finance
samaroah Valuation of Intangible Assets in Few
Financial Perspectives.
SAMARAOH 2015
HYD ,

27. 27
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…

28. 28
Legal and Business Intangible
Trade mark
Copyright
Patent
Brand
Legal Goodwill
Customer List
Customer Loyalty
In house Intellect
Business

29. Intangible asset is:
☺ Identifiable non monetary asset
☺ Without physical substance
☺ Held for use in production or supply of goods or services
29
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

30. 30
Types of Intangible Asset

31. CLASSIFICATION
OF INTANGIBLE
ASSETS
Purchased
Intangibles
Internally
created
intangibles
Indefinite life
intangibles
Limited- life
intangibles
31
Classification

32. 32
Annual Report /
Financial Statement
analysis

33. Sector wise Disclosure
33

34. Annual Report Analysis
S.NO Name Of The Company
1Sun pharma
2Lupin
3Aurobindo Pharma
4Divis Labs
5Infosys
6Tech mahindra
7TCS
8Tata Motors
9Maruthi suzuki
10Hero Moto Corp
11Ashok leyland
12Relaince
13Tata Steel
14Bharati Infratel
15Dabur India
16Emami
17Colgate

35. 35
Intangible Balancesheet as on 31 march 2015
S.NO Sectors
2015 Intangible Assets
Percentage
1 Pharma
Sun pharma In Lakhs
4902790 NIL
0
Lupin In Lakhs
1313774 NIL
0
Aurobindo Pharma In Laksh 1291448 NIL 0
Divis labs In Lakhs
163275 NIL
0
2 IT
Infosys In crore
66289 3661
5.522
Tech Mahindra In millions
198481 1006
0.506
TCS In Lakhs
7366088 NIL
0
3 Auto Motive
Tata Motors In Crores 238657.99 NIL 0
Maruthi Suzuki In Lakhs 3447863 NIL 0
Hero motocorp In Lakhs 1065435 NIL 0
Ashok leyland In lakhs 8258.97 17.98 0.215
4 Industries
Reliance In Crores 397785 65209 16.39
Tata Steel In crores 158945.53 NIL 0
5 Tele communication
Bharati Infratel In Millions 271547 NIl 0
6 FMCG
Nestle 0 0
Dabur India In crores 6106.28 NIL 0
Emami In Laksh 167632 NIL 0
Colgate In Lakhs 170190 NIL 0

36. Comparative of 2013 to 14
S.NO Sectors
Total assets
2014
Total Assets
2013
Intangible assets
2014
Intangible Assets
2013
percentage of
2014
Percentage of
2013
Increase/
Decrease
1 Pharma
Sun pharma In millions 293708.2 205826.7 14884.8 13540.9 5.06 6.57 DEC
Lupin In millions 10206.03 89138.6 1137.6 1404.7 11.14 1.57 INC
Aurobindo Pharma In millions 94898.2 72728.5 2245.9 2187.4 2.36 3 DEC
Divis labs In lakhs 371049.17 313876.46 Nil NIL NIL NIL _
2 IT
Infosys In crore 56966 46331 2322 2332 4.07 5.03 DEC
Tech Mahindra In millions 159396 89844 845 216 0.53 0.24 INC
TCS In crore 67137.78 52167.87 240.74 254.8 0.35 0.48 DEC
3 Auto Motive
Tata Motors In Crores 219998.32 170378.24 23418.55 18680.41 10.64 10.96 DEC
Maruthi Suzuki In millions 314114 275170 1844 2240 0.58 0.81 DEC
Hero motocorp In crore 10121.58 9641.65 349.92 1179.22 3.45 12.23 DEC
Ashok leyland In lakhs 17,53,430.99 1309670 55496.32 48975.77 3.16 3.73 DEC
4 Industries
Reliance In Crores 428843 362357 87009 67533 20.28 18.63 INC
Tata Steel In crores 171644.45 146912.79 4774.86 3449.53 2.78 2.34 INC
5 Tele communication
Bharati Infratel In Millions 286356 276930 166 192 0.05 0.06 DEC
6 FMCG
Nestle In Millions 58195 63142.7 NIL NIL NIL NIl _
Dabur India In crores 5311.78 4708.54 633.91 636.2 11.93 13.51 DEC
Emami In Laksh 130228.6 121616.82 795.72 6723.01 0.61 5.52 DEC
Colgate In Lakhs 148874.99 130677.72 NIL NIL NIL NIL _
36

37. 37
Comparative of 2012-2013
S.NO Sector Total assets 2013
Total Assets
2012
Intangible Assets
2013
Intangible
Assets 2012
Percentage of
2013
Percentage
of 2012
Increase/
Decrease
1 Pharma
Sun pharma In
millions 205826.7 164740 13540.9 3160.3 6.57 1.91 Increase
Lupin In
millions 89138.6 79340.2 1404.7 1910.4 1.57 2.4 Decrease
Aurobindo Pharma In
millions 72728.6 62376.3 2187.4 2528.9 3 4.05 Decrease
Divis labs In
lakhs 313876.46 275665.74 _ _ NIL NIL _
2 IT
Infosys In
crore 46331 38627 2332 1180 5.03 3.05 Increase
Tech mahindra In
millions 89844 69191 216 96 0.24 0.138 Increase
TCS In
crore 52167.87 41394.49 254.8 297.87 0.48 0.71 Decrease
3 Auto Motive
Tata Motors In
Crores 170378.24 145382.64 18680.41 13148.09 10.96 9.04 Increase
Maruthi Suzuki In
millions 275170 230993 2240 2115 0.81 0.915 Decrease
Hero motocorp In crore 9641.65 9888.92 1179.22 2042.37 12.23 20.65 Decrease
Ashok leyland In lakhs 1309670.21 1191574.71 48975.77 46081.46 3.73 3.86 Decrease
4 Industries
Reliance In Crores 362357 327191 67533 54513 18.63 16.66 Increase
Tata Steel In crores 146912.79 147240.16 3449.58 3019.39 2.34 2.05 Increase
5 Tele communication
Bharati Infratel In Millions 276930 234667 192 268 0.06 0.114 Decrease
6 FMCG
Nestle In Millions 63142.7 51639.2 _ _ NIl NIL _
Dabur India In crores 4708.54 284071 636.2 714 13.51 0.251 Increase
Emami In Laksh 121616.82 117733.91 6723.01 16691.45 5.52 14.77 Decrease
Colgate In Lakhs 130677.72 112959.74 _ _ NIL NIL _

38. Comparative of 2011-2012
S.NO Sector
Total Assets
2012
Total Assets
2011
Intangible Assets
2012
Intangible
Assets 2011
Percentage of
2012
Percentage of
2011
Increase/
Decrease
1 Pharma
Sun pharma In millions 164740 124176.4 3160.3 2879.6 1.91 2.31 Decrease
Lupin In millions 79340.2 61243.6 1910.4 1912.6 2.4 3.12 Decrease
Aurobindo Pharma In millions 62376.3 58722.8 2528.9 1906.3 4.05 3.24 Increase
Divis labs In lakhs 275665.74 227477.6 _ _ NIL NIL NIL
2 IT
Infosys In crore 38627 31293 1180 916 3.05 2.92 Increase
Tech Mahindra In millions 69191 60553 96 63 0.138 0.1 Increase
TCS In crore 41394.49 32681.04 297.87 311.76 0.71 0.95 Decrease
3 Auto Motive
Tata Motors In Crores 145382.64 101014.18 13148.09 9002.04 9.04 8.91 Decrease
Maruthi Suzuki In millions 230993 191063 2115 457 0.915 0.23 Increase
Hero motocorp In crore 9888.92 10726.26 2042.37 2467.75 20.65 23 Decrease
Ashok leyland In lakhs 1191574.71 1059331.45 46081.46 44667.65 3.86 4.21 Decrease
4 Industries
Reliance In Crores 327191 307519 54513 73786 16.66 23.99 Decrease
Tata Steel In crores 147240.16 135488.23 3019.39 1790.38 2.05 0.013 Increase
5 Tele communication
Bharati Infratel In Millions 234667 _ 268 _ 0.114 NIL NIL
6 FMCG
Nestle In Millions 51639.2 44017.8 _ _ NIL NIL NIL
Dabur India In crores 284071 240791 714 503 0.251 0.2 Increase
Emami In Laksh 117733.91 109806.73 16691.45 26851.12 14.77 24.45 Decrease
Colgate In Lakhs 112959.74 103401.69 _ _ NIL NIL NIL
38

39. 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
39

40. 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
%
40

41. 41

43.  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

44.  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

45.  Compliance level of the Legal provisions by
Indian Companies in respect of Intangible
Asset Disclosure
 Various valuation methods
 IFRS Comparative study with IAS
H.T
No
–
1203PH1337
45

46.  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
46

47. Disclosure of Balance Sheet
and Financial Statement
47

48. 48
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

49. 49
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

50. 50
Sample Sheet
Analysis

60. Is there a need to improve disclosure practices
/norms of Intangible assets for better analysis of
financial statements

62. The share value of a Company will improve with the
valuation of Intangible assets

72. 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
72
Sample: 1

73. 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
73

74. 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
74

75. 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
75

76. S.No
Categeroy Name
No. Of Samples Familiar Non-Familiar
1Indusrial Representaive 2
2Professionals: 11
3investors 14
4Corporate Repersentive 9
Total 36
76

77. 77
HYPOTHESES

78.  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 adequate and
appropriate
 There is no gap in disclosure , valuation of
Intangible assets between Indian accounting
standards and International Financial
Reporting Standards
78

79.  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
79

80. FUTURE PLAN OF ACTION
80

81.  Theses preparation
 Collecting more Samples
 SPSS data analysis
 Analysis of more balance sheets
 More Paper presentations at International/
national seminars
 Attending seminars at national/ international
level
 Detailed study on IFRS
81

82. 82