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Measuring Intangible Capital with Market Prices
[post]
2020
unpublished
Preserved Fulltext
Existing standards prohibit disclosures of internally created intangible capital to firm balance sheets, resulting in a downward bias of reported assets. To characterize off-balance sheet intangible assets, we use transaction prices to estimate this missing intangible capital. On average, our new measure of intangible capital is 10\% smaller than prior estimates, while varying more by industry. These estimates better explain market values, increase HML portfolio returns, act as a better proxy
doi:10.31235/osf.io/kvp2f
fatcat:votrdyzxtzhm7c2psrqlk4lqvq