• Journal of Advanced Navigation Technology
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• v.16 no.6
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• pp.1116-1122
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• 2012

Many researches predicted the linear relationship between discretionary expenditure and sales amount in manufacturing companies. We review their relationship based on financial reports of KOSDAQ and KOSPI listed companies in category of non-durable goods. Also we review the relationship between expenditure on intangible capital and sales amount in aviation service and related manufacturing firms. Identified manufacturing firms showed linear relationship between R&D expenditure and sales amount. On the contrary, aviation service and related manufacturing companies do not have linear relationship between expenditure on intangible capital and sales, while their general management and sales expenditure has linear relationship with sales. It shows aviation service and related manufacturing company keep advertising or R&D related expenditure as sales revenue decreases, while manufacturing companies of non-durable goods has a tendency to reduce it as sales revenue decreases.

• Asia-Pacific Journal of Business
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• v.11 no.3
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• pp.153-167
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• 2020

Purpose - The purpose of this study is to examine whether social value-related expenditures can be recognized as intangible assets in financial statements. Design/methodology/approach - This study examined social values defined in the economic and management fields and analyzed whether the social values have the characteristics of intangible assets. For this, the general definition of social value was derived from the concept of social value covered in previous studies. Next, we reviewed the definitions and recognition requirements for intangible assets under the current accounting standards. Based on this, we tried to suggest new criteria and disclosure methods for reporting social value-related expenditures that are not currently reported in financial statements as intangible assets in the financial statements and notes. Findings - First, as a criterion for recognizing social value-related expenditure as an intangible asset, we propose a relationship between social value-related expenditure and enterprise value. Where social value-related expenditures have a statistically significant positive impact on corporate value, they are recognized as intangible assets. If social value-related expenditures have a statistically significant negative influence on business value, or the impact of social value-related expenditures on the enterprise value is not statistically significant, it is not recognized as asset. Second, new disclosure plans are proposed according to the combination of intangible assets by category and the relevance of enterprise value. After dividing social value-related expenditures into separate intangible asset categories, if social value-related expenditures have a statistically significant positive impact on corporate value, they are recognized as intangible assets in the financial statements. If expenditures have a statistically significant negative impact on business value, they should be recorded as essential notes. Finally, if the impact of social value-related expenditure on corporate value is not statistically significant, it should be listed as a supplement. Research implications or Originality - This study contributes to the concurrent research in that it is a priori study on whether social value-related expenditure can be recognized as an asset. This study suggests that the economic effect of social expenditure can be recognized in corporate financial statements, thereby providing companies with justification and effectiveness of social value-related expenditure.

• Knowledge Management Research
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• v.11 no.3
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• pp.1-11
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• 2010

The importance of intangible assets have increased unprecedentedly with the advent of the knowledge-based society. Investment in R&D has contributed to the rise of productivity and firm-value in the capital markets. but it is very difficult to determine the economic benefits of R&D investment, due to elusive link between time requirements and the realization of firm value from R&D investment. This study examines the differential effects of R&D expenditure and patents on firm-value by industry. Patents are intangible, proprietary rights that develops new products, plays a crucial role in market competition and results in research and development activities. If firms get patents, their R&D expenditure is assumed to be successful. The study analyzes whether successful R&D expenditure has a significant effect on the firm-value. The study considers two industries : high-tech industries and low-tech industries. These industries are expected to have different effect on R&D expenditure and firm-vale. The results of the study indicate that the successful R&D expenditure increased the firm-value. Successful R&D expenditure in high-tech industries more increased the firm-value more than that in low-tech industries.

• Journal of Korea Technology Innovation Society
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• v.12 no.2
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• pp.291-311
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• 2009

Intellectual Property(IP) investment and its management are an key driver to create corporate value and intangible asset value through corporate's competitiveness. The purposes of this study are to survey capability of IP management and assess the effects of IP investment and its management on the separation into groups of intangible asset value. In order to attain those purposes of this study, sample companies were taken and categorized into three groups by the level of intangible asset value ratio, and data for IP investment such as R&D expenditure and advertising expenditure were collected from 90 manufacturing companies, and data for IP management capability about patent, design and brand were taken through survey. The final results showed as followed: First, IP management capability were generally not sufficient in the results of survey. Second, mean vector for the four variables were significantly different among three groups in multivariate analysis variance. Third, the order of their contribution to separating the groups were R&D expenditure, advertising expenditure, patent management, management of design and brand in canonical variate analysis. Fourth, R&D and patent management capability were significantly related to the separation of three groups, while advertising expenditure were not significant and management of design and brand were not sure of Significance in multinomial logit discriminant analysis. Fifth, exploratory power of the discriminant model were estimated by 53% in classification analysis. Finally, strategic policy for IP investment and its management should be taken urgently to create intangible asset value and to improve the capability of its management.

• Journal of the Korea Academia-Industrial cooperation Society
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• v.20 no.11
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• pp.487-493
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• 2019

This study examines the ratio of R&D expenses in intangible assets for pharmaceutical companies, and determines whether these expenses affect the firm value among companies listed on the KOSDAQ. The research subjects included annual R&D expenses of 39 pharmaceutical companies listed on the KOSDAQ between 2011 and 2017. The survey was achieved via "Panel Data Model" with "Tobin Q" as an independent variable, and the ratio of R&D expenses in intangible as a dependent variable. Results of the study conclude that the ratio of R&D expenses in intangible assets of KOSDAQ pharmaceutical companies negatively influence the Tobin Q (Enterprise Value). A large proportion of intangible assets indicates increased R & D investment, and the operating profit is likely to be low due to the high debt ratio, thereby negatively impacting the enterprise value. This study further investigates whether the existing researches are based on researches that identify the total value of R & D expenditure. Results determine a significant relationship between enterprise value and R & D expenditure.

• Asia-Pacific Journal of Business Venturing and Entrepreneurship
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• v.9 no.1
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• pp.153-164
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• 2014

This study is to investigate the effects of intangible assets such as research & development, education & training and advertisement on firm values of high-technology firms and low-technology firms listed in the KOSDAQ market, and to analyze the value-relativeness between the audit quality of companies and the expenditure of intangible assets. The substitute measurement of firm values is Tobin's Q model. The sample period for positive analysis is from 2003 to 2008, and the samples, excepting for financial business, are manufacturing companies of closing accounts corporate on December, based on companies of KOSDAQ that are listed in security. Finally, data from about 305 companies are used in this analysis. Followings are the results of the analysis. First, research & development, education & training of high-technology firms have an effect on firm values, and education & training of low-technology have an effect on firm values. Second, we find that audit quality(BIG4) increases the value relevance of R&D expenditures of high-technology firms and audit quality(BIG4) increases the value relevance of education & training expenditures of low-technology firms. This paper is meaningful in that it verified the value-relativeness of cost of intangible assets compared with high-technology firms to low-technology firms.

• Korean Journal of Organic Agriculture
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• v.17 no.4
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• pp.413-439
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• 2009

This study conducts a survey and test to understand U.S. public's perception about multifunctionality. The questionnaire suggests seven alternative way of providing questions about intangible benefits provided by agriculture in the U.S. The final questionnaire was administered as an e-mail survey in June 2008 to a nationally representative household panel maintained in the U.S. by the Ipsos Observer. Data analysis shows that 64 percent of respondents considered the multifunctionality of agriculiture as an important issue and 45 percent of respondents were in favor of increasing government expenditure to support farmland preservation. Using Fishbein's multi-attribute model as a theoretical background, this paper develops an empirical model to assess and attributes of multifunctionality. For the analysis, bivariate orderd probit model was set up to reflect respondent's attitude. Regression analyses show that two questions (how much you agree with agriculture's intangible benefit and increasing government expenditure to support agriculture) are shaped by different sets of facts.

• Journal of Korean Society of Industrial and Systems Engineering
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• v.41 no.2
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• pp.153-158
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• 2018

At the Bank of Korea, capital stock statistics were created by the PIM (perpetual inventory method) with fixed capital formation data. Asset classifications also included 2 categories in residential buildings, 4 non-residential buildings, 14 constructions, 9 transportation equipment, 28 machinery, and 2 intangible fixed assets. It is the Korean government accounting system which is developed much with the field of the national accounts including the valuation, but until 2008 it was consistent with single-entry bookkeeping. Many countries, including Korea, were single-entry bookkeeping, not double-entry bookkeeping which can be aggregated by government accounting standard account. There was no distinction in journaling between revenue and capital expenditure when it was consistent with single-entry bookkeeping. For example, we would like to appropriately divide the past budget accounts and the settlement accounts data that have been spent on dredging into capital expenditure and revenue expenditure. It, then, tries to add the capital expenditure calculated to FCF (fixed capital formation), because revenue expenditure is cost for maintenance etc. This could be a new direction, especially, in the estimation of capital stock by the perpetual inventory method for infrastructure (SOC, social overhead capital). It should also be noted that there are differences not only between capital and income expenditure but also by other factors. How long will this difference be covered by the difference between the 'new series' and 'old series' methodologies? In addition, there is no large difference between two series by the major asset classification level. If this is treated as a round-off error, this is a problem.

• Korea Journal of Hospital Management
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• v.11 no.3
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• pp.1-18
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• 2006

The purpose of this study is to analyze the relationship between intangible asset items and company value by empirical research in the medical industry, which may enhance usefulness of the results of other empirical research on intangible asset and company value. In order to attain the purpose of this study, the stock price is taken as the independent variable and all of intangible asset items reported to a balance sheet except the development expenditures and other development expenditures, and advertisement expenses, ordinary research & development expenditures reported on the income statement are taken as the dependent variables. In the following, I carried out four meaningful results from the analysis. First, research hypothesis 1; Book value of intangible asset reported in balance sheet bears positive relationship with company value shows that development expenditures 1 variable gives positive association in a significant level while a group of \10,000-above-company shows no relationship with company value, the other group of below-\10,000-company supports a consistently significant association. All this considering, we have to keep in mind that lack of prudence may leads to wrong results when we try to analyze. Second, research hypothesis 2; Intangible asset and other intangible asset expenditures reported on the income statement gives positive effect on company value shows that R&D accounts variables give insignificance in a statistical level to all company, including entire group, \10,000-above and below consistently. These results testify that current accounting system is valid. Third, in the case of other intangible asset, it requires further examination of current KAS because statistical results show negatively significant value or insignificant value in a statistical level. That means the more intangible assets, the less company value or nothing. Last, in the case of advertisement expenditure variables of above-\10,000 and entire company shows insignificances in a statistical level consistently while below-\10,000-company shows significant result coherently. We should regard accounting information on the advertisement expenditures of \10,000-below-company with caution. The results of this study provide controversial points whether intangible asset items reported on B/S, excluding development expenditures, should be regarded as asset. To facilitate the utility of accounting information on intangible asset, it seems necessary to regard advertisement expenditures reported on I/S as asset accounts. There are further arguments on the way of dealing with intangible asset under KAS that might be considered.

• Knowledge Management Research
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• v.12 no.3
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• pp.59-71
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• 2011

This study intends to examine the effect of research and development (R&D) expenditure effects on firm value through patent and earing persistence. The patent is the representative intangible asset which objectively indicates a typical product of research and development activities to external parties. If a firm has acquired the patent, it receives amicable evaluation from the market compared to the firm which has not acquired patent. Empirical analysis is performed for non-banking firms (1,860 firm-years) listed on Korean Stock Exchange with December fiscal year-end over 2004-2009. Research results are as follows. First, the multiple pricing of patent acquiring firm and earing persistence increased group showed that they have higher prices than the other groups. Second, the multiple pricing of R&D expenditures of earing persistence increased group showed that they have higher prices than the other group. Third, the R&D expenditures of earing persistence increased group is receiving more friendly evaluation from the stock market than the other group.