Raymond Rath, Globalview’s Managing Director in Los Angeles, had an article published in the April 2018 Issue of the CFA Institute Magazine on “Intangible Assets and Share Value”. The CFA Institute is the premier global association for investment management professionals.  The CFA charter is globally recognized by finance, business and other professionals as a result of the rigor of education, experience and other requirements to obtain the CFA charter. CFA Institute publications include the CFA Institute Magazine, CFA Digest and Financial Analysts Journal. The CFA Institute also publishes a variety of texts of interest to investment professionals and investors that can be found at the CFA Bookstore.

Ray’s article on “Intangible Assets and Share Value”, discusses the increasing importance of intangible assets to business success. Key areas discussed in the article include:

  • Accounting requirements pertaining to intangible assets make it difficult to observe intangible asset values on a firm’s balance sheet. Immediate expensing of most expenditure on intangibles also depresses earnings relative to firms that invest more heavily in tangible assets.
  • Growth investments in the development of intangible assets may temporarily depress earnings in the short term and create valuation difficulties.
  • The durability of intangible assets (i.e., the time they will provide benefits to an entity) is an important consideration for investors. All other items held constant, longer lived intangibles would suggest greater earnings stability and a higher stock price.
  • Different types of intangible assets will have different risks and remaining lives. These differences may impact future earnings expectations and stock prices.

For further information, please contact Raymond Rath, ASA, CEIV, CFA® at +1 (949) 475-2808 or rrath@globalviewadvisors.com or Michael Haghighat, ASA at +1 (949) 475-2801 or mhaghighat@globalviewadvisors.com.