Journal of Law and Financial Management - Volume 11 (1) June 2012

Editorial »


Value Oriented Planning of Intangible Customer Contributions

by Bernhard Hirsch and Yvonne Schneider

This article presents a theory-based approach to the identification and integration of intangible elements of customer contribution to value-oriented planning. Our analysis is premised on the Resource Based View and the concept of Value Based Management. We develop a value driver tree, which systematically incorporates the information, coordination, synergy and reference contributions of customers within a long-term business relationship.

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Analysing the Asymmetric Information Associated with Value Line Timeliness One Ranks: A Decision Rule Analysis

by Owen Hall and Darryl Stanley

The Efficient Market Hypothesis (EMH) assumes each security’s price remains at continuous parity with its investment value. Accordingly, EMH denies that analytical trading rules using price or fundamental data result in strategies capable of outperforming market averages on a risk-adjusted basis after transaction costs. This paper demonstrates that analytical trading rules can outperform market averages. Specifically, the analysis shows the possibility of generating superior investment performance by selecting a population subset from the Value Line Timeliness Rank Ones. This study, utilising decision rule analysis, outperformed the Value Line Ones using a 90-day forecasting horizon on a risk-adjusted basis.

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Fair Value Management of Patented Technologies: A Survey of German Certified Accountants

by Hannes Frey, Tim Herberger and Andreas Oehler

Intangible assets are regarded as the future value drivers of company performance. The increased economic importance requires an intensified analyst and investor awareness of (reported) intangible assets and their financial reporting quality. However, hardly anything is known about the actual importance and influence of different intangible asset classes in different industries. To fill this gap, we performed a survey among the German Certified Public Accountants (CPAs) concerning intangible assets with a focus on patented technologies in order to determine the influence of intangible assets. We analysed the statements of the German CPAs with regards to intangible assets and sent a standardised questionnaire to all 180 offices of the top 10 (in terms of revenue) German auditing firms. Our results indicated that intangible assets have gained in importance. According to the German CPAs, the current influence of intangible assets on company performance is on a high level and will even increase during the next few years. The most widely-used valuation approach for the fair value measurement of patented technologies is the income approach. Further, the accounting standards leave options for accounting policy – a result which casts doubt on the reliability and quality of financial statements.

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