Extent of Investment in Intangible Assets: An empirical evaluation of Indian companies

The present paper attempts to measure the extent and growth of investment in Intangible Assets in the Indian corporate sector. The sample consists of 346 Indian companies selected from BT- 500 on the basis of market capitalization. A sufficiently long period of twelve years from 2000-2001 to 2011-2012 has been taken to gauge the extent of investment in Intangible Assets. The ‘Intangible Asset Monitor’ model as proposed by Sveiby (1997) has been used to define and measure intangibles. Intangibles are measured by splitting them into Visible and Invisible intangible assets. The overall analysis reveals that intangible assets have shown Compounded Annual Growth Rate (CAGR) of 23.12 per cent in case of investment in Visible Intangible Assets and 28.65 per cent in case of investment in Invisible Intangible Assets. The proportion of investment in Intangible Assets to Tangible Assets also shows an increasing trend over a period of twelve years. Since Intangible Assets give a competitive edge to the companies; companies have begun to raise their investment in these assets in the contemporary times. More research can be undertaken on Intangible Assets with respect to India. Better measurement and disclosure norms are required for Intangible Assets so that these valuable assets can be better explored. The researchers felt challenged due to want of availability of sufficient data for all companies.