Intangible assets valuation in the Malaysian capital market
| Pages | 391-405 |
| Date | 27 July 2010 |
| Published date | 27 July 2010 |
| DOI | https://doi.org/10.1108/14691931011064608 |
| Author | Norhana Salamudin,Ridzwan Bakar,Muhd Kamil Ibrahim,Faridah Haji Hassan |
| Subject Matter | Accounting & finance,HR & organizational behaviour,Information & knowledge management |
Intangible assets valuation in the
Malaysian capital market
Norhana Salamudin
Institute of Business Excellence, Faculty of Business Management,
Universiti Teknologi MARA, Shah Alam, Malaysia
Ridzwan Bakar
Telekom Malaysia, Kuala Lumpur, Malaysia
Muhd Kamil Ibrahim
Universiti Teknologi MARA, Segamat, Malaysia, and
Faridah Haji Hassan
Institute of Business Excellence, Faculty of Business Management,
Universiti Teknologi MARA, Shah Alam, Malaysia
Abstract
Purpose – This study examines the intangible assets value of the Malaysian market. It measures the
relationship between intangible assets and corporate market value of Malaysian firms and whether
they are consistent with findings in other advanced markets.
Design/methodology/approach – Firstly, the development of intangible assets of Malaysian
companies over 2000 to 2006 were measured statistically using Landsman’s balance sheet identity
model. Then, cross-sectional multi-regression procedure was used to ascertain the relationship
between intangible assets and financial performance.
Findings – The findings reveal that the Malaysian market developed intangible assets at a rather
slow pace, with significant development from year 2004 onwards. It also reveals that the book value of
net assets (BVNA) are still dominant in Malaysian corporate valuation but this trend is declining as
greater interest has now been developed in employing intangible assets and earnings as important
variables. Furthermore, the results indicate that there is a positive trend in intangible assets
development in Malaysia, consistent with those of advanced markets such as the US, Europe and
Australia. However, the Malaysian market lags by about 20 years as compared to the more advanced
ones.
Research limitations/implications – The limitations of this paper are as follows: the time frame
for this study was seven years and it looked at the post-financial crisis period. A longer time frame
may be desirable covering both pre- and post-crisis periods. Secondly, this study did not look into
intangible assets at the micro-level perspective. Unless solid definition, classification, measurement
and valuation of intangible assets have been ascertained, it is not worth dwelling on individual assets,
such as brand, research and development (R&D), and human capital.
Originality/value – The main contribution of this study is that it provides empirical evidence that
intangible assets or intellectual assets are strategic assets that require close attention in line with
development of the knowledge-based economy.
Keywords Intangible assets,Intellectual capital, Assets valuation,Malaysia
Paper type Research paper
Introduction
The knowledge-based economy has transformed the manner companies are valued.
Empirical studies on intangible assets (IA) in the advanced markets have indicated
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1469-1930.htm
Intangible assets
valuation
391
Journal of Intellectual Capital
Vol. 11 No. 3, 2010
pp. 391-405
qEmerald Group Publishing Limited
1469-1930
DOI 10.1108/14691931011064608
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