Intangible asset finance

Intangible Asset Finance is the branch of finance that deals with intangible assets such as patents (legal intangible) and reputation (competitive intangible). Like other areas of finance, intangible asset finance is concerned with the interdependence of value, risk, and time.

Basic principles

In 2003, one estimate put the economic equilibrium of intangible assets in the U.S. economy at $5 trillion, which represented over one-third or more of the value of U.S. domestic corporations in the first quarter of 2001.[1]

One of the goals of people working in this field is to unlock the "hidden value" found in intangible assets through the techniques of finance. Another goal is to measure how firm performance correlates with intangible asset management.

Intangible assets include business processes, Intellectual Property (IP) such as patents, trademarks, reputations for ethics and integrity, quality, safety, sustainability, security, and resilience. Today, these intangibles drive cash flow and are the primary sources of risk. Intangible asset information, management, risk forecasting and risk transfer are growing services as the economic base divests itself of physical assets. Rights to tangible and intangible assets are intangible, and can be traded globally.[2]

Business models

A number of intangible asset business models have evolved over the years.

Significant transactions

Government, societies, think tanks, and other non-profits

On June 23, 2008, the United States National Academies hosted a one-day conference in Washington, D.C. entitled "Intangible Assets: Measuring and Enhancing Their Contribution to Corporate Value and Economic Growth."

The Intangible Asset Finance Society provides a forum for finance, innovation, legal and management professionals to discover better ways to create, capture and preserve the value of intangible assets.

The Athena Alliance is a non-profit organization dedicated to public education and research on the emerging global information economy. On April 16, 2008 it published[9] a widely circulated working paper on the topic of intangible asset finance.

See also


Further reading

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