Intangibles and methods for their valuation in financial terms: Literature review

Abstract

Purpose: The purpose of this paper is to review literature devoted to intangibles and their valuation and give examples of the methods that can be used for valuation of individual intangibles in financial terms.

Design/methodology/approach: Paper presents a systematic review of articles dedicated to intangibles and their valuation.

Findings: This review shows that there is a need for consensus in definitions of intangibles, intangible assets, knowledge assets and other related terms. These terms are used interchangeably in spite of their different meanings. Many methods for valuation of intangibles can be found in the literature, but widely accepted list of basic intangibles with suggested methods for their valuation in financial terms is still missing.

Research limitations/implications: Not all the papers related to this topic could be covered in this paper. Presented list of important intangible components may be enhanced and examples of some other methods for their valuation may be added in the future.

Practical implications: Paper calls for development of framework comprising list of the most important intangibles, proposals of methods used for their valuation and examples of their use. This framework can be helpful for organization, which are confronted with a difficult task of intangibles valuation.

Originality/value: Basic definitions and differences between intangibles, intangible assets, identifiable intangible assets, knowledge assets and intellectual capital have not been mentioned in one paper yet. List of intangibles and methods for their valuation gives a direction for future work that can be fruitful for valuation of intangibles.