This module is a Forbes article about measuring intangible firm assets. It highlights the components of intangible value and reports results from a study conducted by Ernst & Young. A value creation index was created by an unmentioned statistical technique that claims to accurately measure value across multiple industries.
The major learning objectives of this module are somewhat unclear. The article can be summarized as a look at what constitutes an intangible firm asset and how it might play a role in firm valuation.
Target Student Population:
This article is best suited for upper level accounting and finance undergraduates. It does not include the depth necessary to be of value to graduate students.
Prerequisite Knowledge or Skills:
More than basic business knowledge is necessary to benefit from this article. Readers should have some background in firm valuation and asset management to benefit from this article.
Type of Material:
The module is a four-page Internet article.
Supplemental reading material
Evaluation and Observation
This is basically an article right from Forbes. The article discusses how to value firms composed of intangible assets (like dot-coms). The procedures used to develop the value creation index are in line with currently
The article lacks key information that would be of value to academicians and students. The article is not very academic. A refereed journal article would be a better source of knowledge for this type of information.
Several incorrect statements about the role of advertising are also made in the article. The use of reader opinions to develop a list of value components is also suspect. Users should be cautioned to separate fact from fiction.
Potential Effectiveness as a Teaching Tool
The article lays out an appropriate research strategy for handling problems with valuing intangible assets. E-commerce is a valuable domain for understanding this technique and is particularly relevant in the US service economy.
The article is dated. It can be used as a way of looking at how the Internet businesses have evolved. The article is too short to do anything other than act as a starting point for a discussion of firm valuation.
Ease of Use for Both Students and Faculty
The article is easy to access via the Internet, easy to read, and can be printed as a single three-page document.