Editing Intangible asset (section)

==Value of intangible assets==

The most valuable firms, spanning high-tech, pharmaceutical, automotive and financial services industries, derive their competitiveness and market value from intangible rather than physical, that is to say, "tangible" capital. Among companies in the [[S&P 500]], intangibles including intellectual property account for 90% of the total [[market value]].<ref>{{Cite web |title=Intangible Asset Market Value Study |url=https://oceantomo.com/intangible-asset-market-value-study/ |access-date=2024-09-27 |website=Ocean Tomo |language=en-US}}</ref><ref>{{Cite journal|last1=Banker|first1=Rajiv D.|last2=Huang|first2=Rong|last3=Natarajan|first3=Ramachandra (Ram)|last4=Zhao|first4=Sha|date=2015|title=Market Reaction to Intangible Asset Value: Evidence on SG&A Expenditure|url=http://dx.doi.org/10.2139/ssrn.2589319|journal=SSRN Electronic Journal|doi=10.2139/ssrn.2589319|issn=1556-5068|url-access=subscription}}</ref>

Intangible assets, though not always visible, play a crucial role in shaping the success of companies and countries in today's competitive environment. Investing in these assets helps businesses attract skilled talent, build customer loyalty, achieve market success, foster innovation and growth.<ref name=":3">{{Cite web |title=World Intangible Investment Highlights – Better Data for Better Policy – World Intangible Investment Highlights |url=https://www.wipo.int/web-publications/world-intangible-investment-highlights-better-data-for-better-policy/en/world-intangible-investment-highlights.html |access-date=2024-09-27 |website=World Intangible Investment Highlights – Better Data for Better Policy |language=en}}</ref><ref name=":2">{{Cite web |title=Intangible Assets and Intellectual Property |url=https://www.wipo.int/web/intangible-assets |access-date=2024-09-27 |website=intangible-assets |language=en-US}}</ref> These assets also contribute to improved economic opportunities, higher-paying jobs, enhanced product quality. According to [[World Intellectual Property Organization|WIPO]]'s [[World Intellectual Property Report|World IP Report]] (2017), [[intellectual property]] (IP) and other intangibles contribute on average twice as much value as tangible capital to products manufactured and traded along value chains.<ref>{{Cite book |title=World Intellectual Property Report 2017 – Intangible Capital in Global Value Chains |url=https://www.wipo.int/publications/en/details.jsp?id=4225 |access-date=2024-09-27 |website=www.wipo.int |doi=10.34667/tind.28219 |language=en |author1=World Intellectual Property Organization (WIPO) |series=World Intellectual Property Report (WIPR) |date=2017 |publisher=World Intellectual Property Organization |isbn=978-92-805-2895-4 }}</ref>
[[File:Intangible investment by asset type annual growth rate (%), 2011-2021.png|thumb|The fastest growing types of intangible asset over 2011–2021 have been software and data, followed by brands, organizational capital, and new financial products.]]
Recent estimates from Brand Finance used in the [[Global Innovation Index]] (GII) suggest that the global value of intangibles has been growing rapidly over the last 25 years to reach around USD 62 trillion in 2023.<ref>{{Cite web |title=Global Innovation Index 2023: Innovation in the face of uncertainty |url=https://www.wipo.int/web/global-innovation-index/2023/index |access-date=2024-09-27 |website=global-innovation-index |language=en-US}}</ref><ref name=":2" />

In 2023, intangible investment accounted for over 16 percent of [[Gross domestic product|GDP]] in highly intangible-intensive economies like [[Sweden]], the [[United States|United States of America]] (US) and [[France]].<ref name=":3" />A trend showing intangible investment growing faster than tangible investment at country level. [[India]] was the country that experienced the fastest growth in intangible investment from 2011 to 2020.<ref name=":3" />

Software and data and brands are the two fastest growing types of intangible assets, both growing three times faster than R&D between 2011–2021.<ref name=":3" />

Valuing intangible assets is nevertheless a challenge. There is no single methodology to value them. Depending on the type of asset at hand, context and data availability, often a combination of different approaches is used. In most cases, the value of intangibles can be estimated considering the future economic benefits associated with the asset, like projected [[cash flow]]s. However, for many intangibles in practice this can be difficult. The cost to repurchase or recreate an asset or comparison with transactions involving similar assets are also common methods to determine value.<ref name=":2" />

[[Intangible asset finance]], also known as IP finance, is the branch of [[finance]] that uses intangible assets such as [[intellectual property]] (legal intangible) and [[reputation]] (competitive intangible) to gain access to [[credit]]. Intangible assets can for example be used in [[Equity (finance)|equity finance]]. For example, many [[Switzerland|Swiss]] companies use equity finance to support their growth, particularly [[Venture capital]]. The information gathered through interviews indicates that a supportive [[Intellectual property|IP]] portfolio, particularly when reinforced by robust [[patent]]s, plays a crucial role as a contributing factor. Without these rights, investors are reluctant to engage with [[Startup company|startups]].<ref>{{Cite web |date=2023 |title=Unlocking IP-backed Financing Series. Country Perspectives. Switzerland's Journey |url=https://www.wipo.int/edocs/pubdocs/en/wipo-pub-rn2023-3-en-country-perspectives-switzerland-s-journey.pdf |website=wipo.int |page=13}}</ref><ref name=":4">{{Cite web |title=Unlocking Intellectual Property-backed Financing – Country Perspectives |url=https://www.wipo.int/publications/en/series/index.jsp?id=241 |access-date=2024-09-27 |website=www.wipo.int |language=en}}</ref> In [[China]], [[pledge-backed lending]] is the earliest type of [[Intellectual property|IP]] financing developed and the fastest growing one. In 2022, the registered amount of [[patent]] and [[trademark]] pledged lending in China reached CNY 486.9 billion, up 57.1 percent year-on-year. Twenty-eight thousand projects from 26,000 chinese businesses received [[loan]]s, both increasing about 65.5 percent year-on-year.<ref>{{Cite web |date=2023 |title=Unlocking IP-backed Financing Series. Country Perspectives. China's Journey |url=https://www.wipo.int/edocs/pubdocs/en/wipo-pub-rn2023-46-en-country-perspectives-china-s-journey.pdf |website=wipo.int |page=14}}</ref><ref name=":4" />