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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/27465
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| Title: | Markets in Intangibles: Patent Licensing |
| Authors: | GU, FENG
LEV, BARUCH |
| Keywords: | patent licensing
royalty
intangibles |
| Issue Date: | May-2001 |
| Series/Report no.: | Baruch Lev-05 |
| Abstract: | The absence of organized markets in intangibles has been a major
hindrance to their recognition as assets in financial reports. Economic
conditions, however, change fast and markets in intangibles,
particularly in patents and know-how, are operating both off and on-line
(Internet). We examine various valuation and disclosure aspects of the
most active of these markets - the licensing of patents and know-how -
which has grown substantially in recent years. Our findings indicate
that: (a) a significant nonuniformity exists in the financial reporting
of royalty (licensing) income across firms, (b) royalty income is a
highly relevant variable to investors, (c) in addition to being an
important source of income, the intensity of patent royalties provides
investors with a strong signal concerning the value and potential of
R&D expenditures, and (d) given both the direct and indirect
(signaling) valuation implications of royalty income, and the heightened
public concern about the adequacy of information concerning intangibles,
accounting standard-setters should reevaluate firms' disclosure of
various aspects of patents, technology, and know-how. |
| URI: | http://hdl.handle.net/2451/27465 |
| Appears in Collections: | Accounting Working Papers
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