Intangible assets in business valuation, with emphasis on real options approach

Tesis de Máster , 2005 , 71 Páginas , Calificación: B

Economía de las empresas - Banca, bolsa de valores, seguros, contabilidad

The change in the economy in the 20th century is more towards an economy based on ideas, away from the matter based economy of earlier times. The emphasis has shifted from natural resources to thought, ideas, design and organization11 Services replaced the importance of manufacturing. Contractor 2001,
names this overall change as a de-materialization of the economy and quantifies the significance of the change by pointing out that by the end of the twentieth century 79 percent of jobs and 76 percent of the GNP in the United States were in the service sector. This change wasn't visible only in the US.
European and Emerging nations did also portray similar trends.
In 1969 Tobin introduced a new ratio called Tobin's q Ratio12, which have been a great influence on the valuation/measure of intangible components of enterprises. Having a look at the example of Microsoft's
ratio between its market value and its book value, which in 1999 25 to 1 was, reveals the fact that most of the value is in the form of knowledge capital, in its employees, organization, patents, copyrights, brand value, etc. This ratio is bound to increase as the importance of intangible assets rises over the
course of years. Though this increase is certain and expected, the valuation of these assets is still not clarified nor agreed upon. The value of the intangible assets is of importance to different audiences such as academicians, scholars, accountants, consultants, etc. and they haven't been able to come up
with one single approach to solving the problem. This thesis will focus on a particular subset of intangible assets, namely patents, and demonstrate how to value them.

Inhaltsverzeichnis

• List of Figures - Tables - Exhibits – Graphs
• List of Abbreviations
• 1 Intangible Assets
  • 1.1 Definition
  • 1.2 Goodwill
  • 1.3 Classification of Intangible Assets
  • 1.4 Valuation of Intangible Assets
  • 1.5 When to Value Intangible Assets
  • 1.6 Valuation Methods ...
  • 1.7 Value of an Intangible Asset
• 2 Options
  • 2.1 Stock Options
    • 2.1.1 Call Options
    • 2.1.2 Put Options
    • 2.1.3 Positions in Options
  • 2.2 Real Options
  • 2.3 Classification of Real Options
    • 2.2.1 Variables in Option Valuation
    • 2.2.2 An Anecdote: The first ever Real Option in History
  • 2.4 Figures in Real Options
  • 2.5 Comparison of Valuation Methods
    • 2.5.1 NPV method
    • 2.5.2 Decision Tree Analysis
    • 2.5.3 Real Options Analysis
    • 2.5.4 The Marketed Asset Disclaimer(MAD)
    • 2.5.5 Risk-Neutral Probability Approach
    • 2.5.6 Black Scholes Approach
• 3 Patents & Real Options in Valuation of Patents
  • 3.1 What's a patent?
  • 3.2 Why value patents?
  • 3.3 When value patents?
  • 3.4 The Value of a Patent
  • 3.5 Patent Valuation Methods
    • 3.5.1 Cost Based Approaches
    • 3.5.2 Market Based Approaches
    • 3.5.3 Income based methods
    • 3.5.4 Time and Uncertainty - DCF based approaches
    • 3.5.5 DTA based methods
    • 3.5.6 OPT based methods
• 4 Case Study
  • 4.1 The Background
  • 4.2 Calculation
    • 4.2.1 Value without Flexibility
    • 4.2.2 Implementing the Options
    • 4.2.3 ROA Calculations
    • 4.2.4 Optimal Decisions
• 5 Conclusion
• List of sources
• Appendix

Zielsetzung und Themenschwerpunkte

This master thesis aims to explore the valuation of intangible assets in business valuation, with a particular focus on the real options approach. The thesis examines the concept of intangible assets, their classification, and various valuation methods. It delves into the theory of real options, their application in business valuation, and their relevance in the context of patent valuation.

• Intangible assets and their valuation
• Real options theory and its application in business valuation
• Patent valuation using real options
• Case study demonstrating the application of real options in a specific business scenario
• Comparison of different valuation methods, including traditional discounted cash flow (DCF) and real options analysis (ROA)

Zusammenfassung der Kapitel

Chapter 1 provides a comprehensive overview of intangible assets, defining their nature, discussing their classification, and exploring various methods for their valuation. It also examines the importance of valuing intangible assets and the circumstances under which such valuation is necessary.

Chapter 2 delves into the concept of options, both financial and real. It explains the different types of options, including call and put options, and discusses the various positions that can be taken in options trading. The chapter then introduces real options, their classification, and the key variables involved in their valuation. It also provides a historical anecdote about the first real option ever used.

Chapter 3 focuses on the valuation of patents using real options. It defines patents, explains the reasons for valuing them, and outlines the circumstances under which such valuation is required. The chapter then explores the value of a patent and examines various methods for its valuation, including cost-based, market-based, income-based, DCF-based, decision tree analysis (DTA), and option pricing theory (OPT) based approaches.

Chapter 4 presents a case study that demonstrates the application of real options in a specific business scenario. It outlines the background of the case, performs calculations to determine the value of the project with and without flexibility, and analyzes the optimal decisions based on real options analysis.

Schlüsselwörter

The keywords and focus themes of the text include intangible assets, business valuation, real options, patent valuation, discounted cash flow (DCF), decision tree analysis (DTA), option pricing theory (OPT), and case study. The thesis explores the application of real options in valuing intangible assets, particularly patents, and compares it to traditional valuation methods like DCF. It aims to provide insights into the benefits and challenges of using real options in business valuation.

• Universidad: University of Applied Sciences Berlin
• Calificación: B
• Autor: Selcuk Kocak (Autor)
• Año de publicación: 2005
• Páginas: 71
• No. de catálogo: V112308
• ISBN (Ebook): 9783640122325
• ISBN (Libro): 9783640123681
• Idioma: Inglés
• Etiqueta: Intangible, valuation, real options, real options approach, intangible assests, ready