Unveiling Intangibles

Abstract

Intangible assets are supposedly more important over time. It is difficult to estimate the market values of intangible assets. I use acquisition accounting to measure the market value of intangibles over time. I find that, contrary to popular belief, the intangible asset intensity has been stable in the past two decades. But there is a significant rise in customer-related intangibles. Also, there is some evidence of an increase in technology-related intangibles and intangibles under USPTO protection. Previous estimates of intangibles, using the perpetual inventory method on R&D expenses and SG&A expenses, appear to underestimate the intangible assets firms have.

Keywords: corporate finance, intangibles

JEL Classification: G32, G34