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Existing assets to the specific material and product form, including the production of tangible assets and non-produced tangible assets. Production of tangible assets is the production activities to create assets; tangible non-produced assets are natural assets without production achieved. Production of tangible assets, including tangible fixed assets, inventory (stock) and precious items . Tangible fixed assets, including residential, houses and buildings, machinery and equipment, raw materials and supplies, in the process, finished goods, and resell the goods; Non-production of tangible assets include land, subsoil assets, non-cultivated biological resources and water resources. Tangible assets can be further divided into physical and financial assets. Physical asset is the value in use of the property or material. Financial asset is the currency and securities.
The value of the tangible assets created by its physical nature, that is, given the value of tangible assets by tangible, physical and visual factors. The value of the tangible assets from its material characteristics, their property rights are intangible, but it comes from their material characteristics.
Number of tangible assets can generally be found on the company's financial statements. When considering the strategic value of a tangible asset, not only to see the number, but also pay attention to the evaluation of its potential to produce a competitive advantage. Companies can increase the rate of return on tangible assets through a variety of methods, such as the use of advanced technologies and processes to increase the utilization of resources; jointly with other enterprises, especially in the joint with suppliers and customers, in order to fully utilize the resources. In fact, due to the different enterprises to master the technology, personnel and quality are very different, so they take advantage of the ability of certain tangible assets is also different. In other words, the same tangible assets exhibit different strategic value to companies of different abilities.
Intangible assets refer to enterprises for the production of goods or rendering of services, for rental to others, or for administrative purposes and holds a long-term, non-monetary asset without physical form.
Generalized intangible assets including financial assets, long-term equity investments, patents, trademarks, etc., because they do not have a material entity, but the performance of some kind of legal rights or technology.
The general term of the company to run all intangible assets is intellectual capital, including market assets, intellectual property assets, personnel assets and infrastructure assets. Annie Brooking (1996)
Intangible assets equivalent to the intellectual capital, including human capital, structural capital and customer capital. Thomas â€¢ A â€¢ Stuart (1997)
Intangible assets refer to future expected income of non-physical assets can bring enterprise the production of goods or services provided in non-physical assets or corporate control. Cloth Lyle & Warman (2001)
Intangible assets typically include patent rights, technology, trademarks, copyrights, royalties, land use rights.
Intangible assets can be divided into identifiable and non-identifiable intangible assets. Identifiable intangible assets, including patents, proprietary technology, trademarks, land use rights, concessions, etc; unidentifiable intangible assets is goodwill.
Intangible assets following conditions are satisfied at the same time, in order to be recognized .The intangible assets related to the economic benefits are likely to flow to the enterprise; The cost of the intangible asset can be measured reliably.
Role of intangible assetsï¼š
Use of intangible assets as security for loans (such as trademarks, patents, copyrights, equity pledge registration as security for loans), commercial registration, increase investment, equity participation, shareholders funded immaterial property, license to use, transfer, lease contract, liquidation auction;
Increase brand awareness, show the strength of enterprises, enhance cohesion, brand imageï¼›
Enterprise use operation of intangible assets with international standards, and then enter the international market;
The protection of intellectual property to provide claim is based on the need for enterprise cracking down on fake products, infringement, litigation;
Through the evaluation of Intangible assets, the business of the inventory can be completedï¼Œ to provide the management information to operators thus reasonable allocation of resources.
Project financing, joint venture, merger, acquisition, attract investment, investment in intangible assets, investment, Intangible assets is the core attraction of foreign investment (such as commercial brand, corporate profitability, sales, channels, personnel , R & D capabilities, etc.).
Intangible assets capital to invest in shares can bring many benefits for the enterprise. First of all, can ease the difficulties of registered capital and increase investment. Some people want to start a business, because of lack of funds to run the new company, can use intangible assets as part of the of registered capital to be registered, especially in some high-tech enterprise, especially; The number of enterprises registered capital is too low, giving the marketing difficulties, want to increase the registered capital, but the lack of funds, then can use the immaterial property investment shares to overcome this difficulty.
In the era of the industrial economy, the economic growth is mainly dependent on the plant, equipment, funds, and in the era of knowledge economy, patents, proprietary technology, trademarks, goodwill, information, computer software and other Intangible assets of innovation and sustainable development of economic growth play a decisive role.
Intangible assets unlike land, buildings, machinery and equipment as a specific physical form in front of people, but in the era of knowledge economy, it does play a role can not be ignored for the sustainable development of enterprises.
In the era of knowledge economy, the process of economic globalization in further exacerbated, it should be recognized that there is a process of continuous improvement of the status and role of intangible assets, when the increasingly competitive market, the more complex the business activities, intangible assets continues to increase, while its status and role of the more trend in the core, so that the number of high-tech enterprises are facing the danger instance to be suspended because of the loss of Intangible assets and can not sell their products.
In the day-to-day purchasing behavior, will you confused with a wide variety, all kinds of brand? And do not know how to make your decisions? What are the determinists to help you to choose goods finally? Of course, we want to buy the most cost-effective products, imagine that, we can not get them to try one by one, we will proceed from experience to choose reputable manufacturers and the well-known brands. In our selection process, in fact these Intangible assets play a role in the process. It has a strong appeal and influence, sometimes forcing us to make not entirely rational choice, wonderful role of the brand is to be able to win the goodwill of consumers to obtain the trust of consumers, which products sold, win opportunities to make goods in an invincible position in the competition for a long time.
In the context of the era of knowledge economy, the value of Intangible assets can be much higher than the tangible assets, because the value of the tangible assets, after all is limited, while the value of Intangible assets can be unlimited.
200 brand value rankings released by the United States <Business Week> in November 2003, Coca-Cola topped the brand value of up to $ 70.45 billion, which strong value of intangible assets is evident. No wonder the boss of the Coca-Cola Company said: Even now, all the property of the Coca-Cola was burned, we still can dominate the world with this brand again - this is the power of Intangible assets. This kind of self-confidence and competitive advantage also reflected in other international brands. For example, Intangible assets and tangible assets ratio of 70% versus 30% respectively in the world famous Microsoft, It can be predicted that the proportion of Intangible assets will continue to expand in the future of the company's new assets. The United States has been able to occupy a dominant position for a long in the world, relying on its powerful economic force, In fact, that is expanding the tremendous power of intangible assets which included in enterprises and products. Intangible assets growth with the support of modern marketing tools and modern technology means, its speed can be much higher than the growth of the tangible assets of the enterprise, which means giving enterprises more excess profits.
Let us look at the following data: In the high-tech is widely used in the United States, the research and development expenses of non-financial firms as a percentage of GDP, rose from an average of 2.2% in 1980-1989 to an average of 2.9% in 1990-1997, the proportion of investment in tangible assets decline from 14.1% to 12.6% in the global. At the same time, the S & P500 index which to reflect the market value of the major U.S. companies from 135.76 points in 1980 raised to 1342.62 points on November 20, 2000, an increase of nearly 1O times. This shows that intangible assets play an increasingly important role in the creation of enterprise value.
In addition, activate tangible assets with intangible assets, is the best way for low-cost expansion, the greatest advantage is to avoid repeated investment and redundant development. It is crucial for the adjustment of economic structure, promote the virtuous circle of the whole national economy.
Haier as the number one of Chinese home appliance brand, one of the features of the expansion is to make an activation of tangible assets with intangible assets, which is written into textbook as classic case of Harvard Business School.
Before Haier mergers Qingdao Red Star Electric Appliance Factory, total assets of 400 million Yuan, while total liabilities amounted over to 500 million, 133 million insolvent, the debt ratio up to 140%. After taken over by Haier Group, it was reorganized as Haier Washing Machine Corporation, and directed to employees with a series of management concepts, these ideas like an invisible hand united the almost defeated team and elevated to an orderly, self-discipline, quick job status, burst out of powerful life and been enable enterprises to gain the extraordinary development: made up the deficits and get surpluses in three months, profit $ 1.5 million in the fifth month, passed certification of the IS09001 international quality system in the Second year, won Chinese washing machine "Top 10 Brands", consumers shopping preferred brand, etc; market share has risen to 22% of 100 large shopping malls in the country at the end of 1996, It rose to 28.31% the first half of 1997, five percentage higher than the second. The International market share is far ahead of other brand in China, the number of Automatic washing machines exported to Japan has been accounted 95% of total exports, accounting of 61% total imports of Japan; On this basis, Haier Washing machine merger the Guangdong Shunde washing machine factory again as an investment holding company brand in May 1997, after that set up Shunde Haier Electric Company and resume production within two months, created people are even saying so " terrible Haier speed"; September 1997 in cooperation with West Lake in Hangzhou, Haier take advantage of value of intangible assets, set up the Haier Holdings Electric Company Hangzhou without invest a penny and successfully developed a series of TV with Haier brand.
In June 2001, the Haier Group's acquired global line of credit of 300 million U.S. dollars from the Bank of China, This is the bank of China the first and the only time to give China enterprise a global credit in China. With the global credit of Bank of China, Haier financing approval procedures will be greatly simplified, the domestic and foreign investment projects within 300 million US dollars will be more rapid and timely service; In addition, the Bank of China branches and agencies around the world will give Haier Group worldwide localization financing to facilitate. Haier could not successfully obtain such wholesale funding without such huge brand effect of Haier.
Be seen from the above: intangible assets so important for businesses; this trend has been vividly interpreted by Larry Wright who's the famous Brand strategy experts in American. Owns the market more important than having the factory, and the only way to have a market is to have the brand as intangible as the core which is dominant in the market.