Accounting Blog for Business
Posted by D&V Accounting Services
Apr 19, 2016 3:25:22 PM
It’s somewhat easy to place value on a company’s physical assets such as land, equipment, vehicles, inventory, and any other tangible property. However, as modernization continues to take over all businesses, the issue of valuing intangible assets is gaining more importance than ever, in terms of how it could significantly affect business appraisal and at the same time, how the business valuation methods could be tricky. How could you attach a price on something that is not physically visible, more so without any set rules? We recommend bigdata technology.
What are Intangible Assets?Investopedia defines an intangible asset as an asset that is not physical in nature. This could be anything from a company’s corporate intellectual property, to proprietary technology, customer data, goodwill, brand recognition, and the list could extensively go on. Some examples would be patents, copyrights, trademark, logos, business methodologies, proprietary software, good relationships with customers or employees, mailing lists, or a solid customer base. It could be anything intangible that contributes to the valuation of a business or a specific brand.
Big Data: Today’s Most Substantial Intangible Asset
Big Data is the lifeblood of today’s modern businesses, e-commerce sites, and tech giants such as Google and Facebook. With the troves of customer data gathered day by day, plus the myriad of algorithms used, it is imperative in the modern world for data to be used to any company’s advantage. While the Financial Accounting Standards Board (FASB) hasn’t fully established regulations for valuing a business based on intangibles and how to place them on financial statements, other companies are fully aware of the growing shift, and are currently adapting to use their own data to amplify their value.For instance, when RadioShack applied for bankruptcy protection in 2015, its intangibles and customer data were valued at $26.2 million. This is on top of the $170 million-worth of tangible assets from its inventories, real-estate, and leases. Another example would be Nielsen Holdings NV, a consumer research company which monitors and measures what people watch on television and what they buy in stores, assigned a value to its customer-related intangibles at a whopping $1.98 billion. This only means one thing—the value that intangible assets bring is HUGE.
How Properly Managed Data Can Boost Your Business
The greatest use of data for businesses is to study customer behavior, buying patterns, and market trends, allowing them to customize their offerings and formulate a more targeted approach for marketing and sales. This saves companies a huge amount of time, money, and effort, and at the same time, is guaranteed to have higher returns on investment because they certainly did their homework.
Data that is just sitting around is deemed worthless until organized, visualized, and analyzed in such a way that it provides significant insights, serving as an eye-opener to a lot of uncharted opportunities. Now is the best time to consider the use of data to cultivate your business—from getting to know your customers and the market really well to managing customer and employee relationships, and a whole lot more. By using data to its full potential, you enrich the value of your brand, making it even more attractive out there in the market especially for investors.
Right now, there might not be any standard intangible asset valuation methods, but one thing is for sure: data, used in the best sense, makes money in every way possible. Act now and be ahead of your competitors by having your data organized, visualized, and easily understood to make better decisions and achieve the best business outcomes in no time!Curious on how to extract brilliant insights and increase your brand’s value through your accumulated data? Get in touch now with the finance experts at D&V to learn more about Business Analytics and Business Intelligence tools and how it can make a significant impact on your data!