Money, finances and credit

Financial and accounting approaches to definition of the intangible factors impact on the value of the company

Economic Annals-XXI

Economic Annals-ХХI: Volume 160, Issue 7-8, Pages: 121-125

Citation information:
Boronos, V., Plikus, I., & Aleksandrov, V. (2016). Financial and accounting approaches to definition of the intangible factors impact on the value of the company. Economic Annals-XXI, 160(7-8), 121-125. doi: https://doi.org/10.21003/ea.V160-24

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Victoria Boronos
D.Sc. (Economics),
Professor,
Sumy State University
2 Rimsky-Korsakov Str., Sumy, 40007, Ukraine
boronos_v@mail.ru

Iryna Plikus
PhD (Economics),
Associate Professor,
Sumy State University
2 Rimsky-Korsakov Str., Sumy, 40007, Ukraine
plikusirina@gmail.com

Vadym Aleksandrov
PhD (Engineering),
Associate Professor,
Sumy State University
2 Rimsky-Korsakov Str., Sumy, 40007, Ukraine
aleksandrov_v@ukr.net

Financial and accounting approaches to definition of the intangible factors impact on the value of the company

Abstract. Introduction. Business value is largely determined by intangible assets, namely intellectual and information resources. Ukrainian companies pay little attention to Research and Development. As a result, they lag behind in their core activities, development, patent and offer very few technological solutions. Therefore, studies related to intangible assets and their role in the creation of enterprise value are vital.

The purpose of the article is to evaluate profits of owners who neglect intangible assets which influence the value of the company based at systematisation of the existing financial and accounting approaches.

Results. The systematization of financial and accounting approaches to determining the value of the enterprise and assess the impact of intangible factors to the enterprise value. The authors have proved the difference in value of equity calculated according to the balance sheet and its market value caused by the hidden (off-balance) capital. The proposed analytical model of the enterprise includes loss of profits due to the influence of intangible factors. It identifies three important intangible factors affecting the value of the company, namely the number of loyal customers and the quality of loyalty; training skills and loyalty to the enterprise, and recognition of the brand.

Conclusion. The present financial statements do not allow estimating the market value of enterprises, since not all the intangible factors are reflected in the financial statements. The management of intangible factors, such as a business enterprise reputation, knowledge and competence of staff, customer loyalty, remains controversial and methodologically unsolved and requires further studies.

Keywords: Business Value; Value-oriented Management; Intangible Assets; Cost Accounting Model; Loss Profit of Owners of Enterprise

JEL Classification: C13; G32; M41

DOI: https://doi.org/10.21003/ea.V160-24

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Received 14.04.2016

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