Intangibles: Management, Measurement, and Reporting [Paperback]

Baruch Lev (Author)

Book Description

Publication Date: June 27, 2001

This book is the first comprehensive, scientifically based study of the nature and impact of intangibles. Weaving case studies and real-world examples with contemporary business theory, Baruch Lev - establishes an economic framework to analyze managerial and investment issues concerning intangibles; - surveys the impact of intangibles on corporate performance and market values, including management difficulties, risk, questions of property rights, marketability, and cost structure; - analyzes information deficiencies associated with intangibles, including the major economic principles governing intangible investments, limits of management information systems, and recommendations for improved accounting disclosure; - sets forth a comprehensive information systemaimed at satisfying the needs of both internal and external decision makersto reflect the impact and value of intangibles within the context of enterprise performance.

Editorial Reviews

About the Author

Baruch Lev is professor of accounting and finance at New York University and the director of the Vincent C. Ross Project for Research on Intangibles. He is the award-winning author of several books and numerous research studies published in the leading accounting, finance, and economic journals.

Product Details

• Paperback: 228 pages
• Publisher: Brookings Institution Press (June 27, 2001)
• Language: English
• ISBN-10: 0815700938
• ISBN-13: 978-0815700937
• Product Dimensions: 9.2 x 6 x 0.6 inches
• Shipping Weight: 12 ounces (View shipping rates and policies)
• Average Customer Review: 4.5 out of 5 stars  See all reviews (10 customer reviews)
• Amazon Best Sellers Rank: #838,124 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

6 of 6 people found the following review helpful:

5.0 out of 5 stars Thoughtful Treatment of a Tremendous Problem, July 11, 2001

By 

Craig L. Howe "The Pointed Pundit" (Darien, CT United States) - See all my reviews
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This review is from: Intangibles: Management, Measurement, and Reporting (Paperback)

There is no larger controversy in accounting or investment circles today than the treatment of intangible assets. Economists and investment analysts may debate what is new about the "New Economy", but one thing remains clear, intangible assets are assuming a critical role in the creation of wealth.

Non-physical sources of value, intangible assets are generated by innovation, unique organizations and human resource practices. This asset class often interacts with tangible and financial assets to create shareholder value and stimulate economic growth. Yet they remain conspicuously absent from required disclosures.

Baruch Lev argues in this book that his lack of public information results in improved management of corporate assets contributes to a higher cost of capital and affords abnormally large gains to insiders at the expense of outside investors. To level the playing field, Lev proposes companies periodically release, in addition to the required income, balance sheet and cash flow statements, quantitative and standardized information most relevant to the company value chain or business model.

Specifically, he would require three classes of timely disclosure on what he calls the innovative and successful company's lifeline: Discovery and Learning, Implementation and Commercialization. Under Discovery and Learning, he would require disclosure of internal renewal, acquired capabilities and networks. For Implementation, required disclosures would include intellectual property, technological feasibility and Internet metrics. For Commercialization, required disclosures would include data on customers, performance and growth prospects.

These disclosures will transform the accounting profession from one that is essentially backward looking - how much was sold at what cost - to a forward looking - the creation of value enhancing assets. This recognizes that in the current knowledge-based economy, value creation or destruction precedes transactions, often by years.

Lev's proposed disclosures would compliment current disclosures, providing a reality check on the system of value creation or destruction as products, services and processes move along the value chain.

5 of 5 people found the following review helpful:

2.0 out of 5 stars One side of the story, December 5, 2004

By 

Christopher Macrae "intangibles mapmaker" (Rockville, MD USA) - See all my reviews
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This review is from: Intangibles: Management, Measurement, and Reporting (Paperback)

This book was published 2001 by Brookings as part of a pair; the other being Unseen Wealth

Lev's book comprised his view, whereas Unseen Wealth included about 20 views including Lev's

Lev is primarily concerned with helping the accounting industry fill its black hole; intangibles being the difference between market value and the tangibles that the 100 years rules of tangible accounting prescribe for. Formerly this blackhole was also known as goodwill.

The trouble is as the service and globally/locally networked economies compounded over the last quarter century, goodwill (or transparent trustflows of an organisation mapped in flows of productivities and demands and across to partnering organisations) became the larger dynamic explaining how most value compounds (both finacially and in human terms like learning, community, social progress that take more than 90 days to invest in and may have diverse views of development).

I dont find in Lev's book any answers to such issues as how to resolve the wicked assumptions that all tangible accounting revolve round. These include:
people are costs, only machines are investments

separate units, separate 90 day periods rather than want to map how they interact and compound in non-lonear ways

What is really needed for tracking, strategizing, transparently governing, leading, developing intangibles (and human relationships) is an opposite type of maths that value multiplies instead of separating out bottom lines as if everything in teh world adds up perfectly in 90 days periods. Whilst Unseen Wealth is clear about the magnitude of the Intangibles Crisis, Lev is not so clear. However, his work is the middleground and epicentre if you are looking at intangibles only from the perspective of what to do if you are intent on perpetuating the traditional accounting profession as nearly as possible as is.

4 of 4 people found the following review helpful:

5.0 out of 5 stars Excellent Overall - weak in Human Capital, July 23, 2001

By 

Matthew Barney "drmattbarney" (Vacaville, CA) - See all my reviews
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This review is from: Intangibles: Management, Measurement, and Reporting (Hardcover)

Overall, Lev has created a landmark review of the state-of-the science in Intangible Asset Valuation. I haven't found a better book on this very new area, particularly from an Academic Finance point of view.

My main quibble is with his lite treatment of human resource drivers of value. In making his conclusion, he places more weight on a working paper than he does on two peer-reviewed papers in good journals showing relationships between high-end HR practices and shareholder value.

Lev suggests nicely, though, how value gets created, and specific metrics (with empirical support) that are helpful in each part of the value chain. Rather than citing Kaplan & Norton, he creates his own "Value Chain Scoreboard". If he informed his approach with new ideas from Organizational Psychology (e.g. John Bodureau), Industrial Engineering and Marketing, and this would be 5 stars.

Overall, I like Jeanne DiFrancesco's (ProOrbis) ideas better for more concrete application of intangible value creation, measurement and optimal asset mix.