Managing Intangible Value Drivers of Technology Companies: Reporting Paradox Effects

Abstract

The major role in creating value for technology companies undoubtedly belongs to intangibles. The management total intangible value of technology companies as a driving force is not only in creating added value but in creating a unique competitive advantage. Management needs require relevant information and a clear understanding of the relationship between the assets to be managed and the metrics that characterize the management outcome. The purpose of this article is to establish the impact of managing of disclosed intangible assets on the market value of technology companies. The regression analysis was used based on data from annual reports of 97 U.S. technology companies for 2020 (Form 10-K).It has been established that disclosed intangible assets are not a significant driver of the value of technology companies. This highlights the problem of irrelevant disclosure of information on intangible assets in the financial statements of technology companies, which necessitates improving the accounting of human resources as a significant impact on the value of technology companies. Despite the fact that researchers confirm the significant impact of intangible assets on the value of companies, it was in our study based on data from technology companies that disclosed intangible assets were recognized as an insignificant parameter of impact on their market value. In this regard, one of the prospects for further research is to improve the standards governing the process of recognition and accounting of intangible assets in technology companies, in terms of developing a methodology for capitalizing the costs incurred for the development of human capital, and taking into account the strategic potential of human capital as a component of their brand value.