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Intangible Assets

Abstract

This research explores on how professional appraisers in Kuwait arrive to the fair market value in small and medium privately owned (not publicly listed) enterprises.
The empirical evidence provides insight on the elements affecting fair market value, in particular, the effect of intangible assets, and the challenges appraisers might face.
To perform this study, financial and business advisors who play an essential role in business valuation, were interviewed in their workplace.
In-depth interviews through qualitative method have been used. Content analysis has been used in order to arrive to the commonalities and variations in the answers amongst interviewees.
In the findings, the study showed that intangible assets such as customer list, brand name, company reputation, and location are significantly important elements; meanwhile, the size of the company is taken into consideration, but not that important. In addition, key persons amongst human capital are also considered. Finally, the measurement of owner- manager role in generating earnings depends on the industry.
The common methods used for valuing an ongoing concern are the discounted cash flow method and the capitalized earnings method.
Key words: business valuation, intangible assets, business valuation process, accounting standards, SMEs.

ACKNOWLEDGEMENT

First, I would want to thank the Almighty God for every thing .
This thesis is written as part of Master’s program in Business Administration, Kuwait Maastricht Business School. There were many people who contributed towards the success of this research study, and I would like to thank them all for their valuable time, efforts, and well wishes.
First of all, I would like to thank my supervisor Johnathan Njoku, (Associate Professor of Accounting, Kuwait Maastricht Business School) whom without his guidance, a successful completion of this research thesis might have been a very difficult task to complete. His critique and...