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JOURNAL OF INTERDISCIPLINARY RESEARCH

in any way (oil, etc.) (Hašková et al., 2020). Wang, Zhang, and
Ouyang (2009) investigated whether advertising of a company
can be included in its intangible assets. Therefore, they proposed
a methodology for determining long-term advertising
performance and suggested several methods of how individual
companies can create their own equity through advertising.
According to Marrocu, Paci, and Pontis (2012), competitive
advantage of companies is dependent on intangible assets.
Therefore, they point out the importance of policies aimed at the
accumulation of intangible assets within a company. Axtle-Ortiz
(2013) investigated the perception of coroporate intangible assets
on the basis of the geographical area in which a company
operates. According to the author, the parameters such as
geographical area, sector, and size of organization are
statistically important factors influencing the characteristics of
intangible assets.

The following part of the scientific literature analysis will deal
with the individual methods of business intangible assets
valuation and valuation of selected intangible assetss of a
business.

Pakosta, Činčalová, and Pátek (2017) dealt with the use of
individual methods for determining business intangible assets
value. A total of three methods of business intangible assets
valuation were used. According to the authors, the best method
of intangible assets valuation is the method of licence analogy.
Ficco (2018) presents several models for the valuation of
intangible assets. These models are based on the Ohlson model,
which was published in 1995. These models can also be used for
the stock valuation on the stock markets. Lu and Lin (2016) used
data-mining for the identification of the factors influencing the
creation of intangible assets and thus the share on the overall
business value. Three methods were used: a decision tree,
association rule method, and the method of genetic algorithms,
where the decision tree method showed the highest explanatory
value with the minimum error of first and second type. This was
confirmed also by Tsai, Lu, and Yen (2012), who used a total of
five methods, namely the principal component analysis method,
stepwise regression, decision tree method, association rule
method, and the method of genetic algorithms. In order to
determine the most suitable method of intangible assets
valuation, artificial multilayer neural networks (MLP) were used.
Artificial neural networks were used to determine a
comprehensive method for evaluation by Horák et al. (2020).
According to Honková (2017), one of the methods for
determining the value of business intangible assets showing
significal statistical resutls is the method of discounted cash
flows method (DCF). It is a difference between the DCF result
and equity.

Since corporate intangible assets consisting of know-how have a
major impact on the creation of a company business value,
Hanafizadeh, Hosseinioun, and Khedmatgozar (2015) dealt with
the valuation of corporate business models as a set containing all
intangible asset of the company. Know-how is also referred to as
“intellectual property”, which a more popular designation. It
consists of three parts: human capital, structural capital, and
relational capital (Pastor et al., 2017). Sanchez-Segura et al.
(2014) argue that the value of corporate intangible assets shall be
determined based on its contribution to the achievement of
business objectives, not on the basis of its volume.

3 Materials and Methods

For the purposes of this contribution, the model association
XYZ, this is in the process of the transformation of its business
form, provided all past accounting data representing its
accounting status, along with the list of all tangible assets, which
will be subsequently transferred into the newly established
business entity (LLC), and which will represent its initial
accounting status. The transformation of the legal form of the
model association XYZ will not change its main business.
Therefore, its inventories, low-value tangible assets, financial
assets, receivables, payables will be values, and the value of the

intangible assets the association XYZ created over the period of
its existence on the market will be determined.

First, there will be assessed the development of the Industrial
Production Index in the Czech Republic on the basis of the data
from the Czech Statistical Office (CSO). Next, the financial
health of the model association XYZ will be assessed.
Subsequently, all items representing the initial inputs in the
newly established company will be valued using asset-based and
income-based methods. Finally, the value of intangible
components of business, which is one of the inputs into the
newly established LLC, will be determined using the difference
of the values of the model association XYZ determined by
means of the valuation methods used.

Quarterly data on the Industrial Production Index will be
obtained from the CSO. Based on the time series of the data
obtained, a graph will be created (see Figure 2) that will show
the gradual development of this index over time. On the basis of
this development, it will be possible to determine more precisely
the current trend of the development of the whole industry and
then the overall financial health of the model association XYZ,
whose intangible assets are the subject of the valuation.

After that, selected accounting indicators for the period of the
last five years preceding the date of the valuation, that is, 2012–
2017 will be analysed. Using this analysis and considering the
development trend of the whole industry, the overall financial
health of the given model association XYZ will be assessed.
Within the financial analysis of the model association XYZ, the
difference of revenue and expenditure items will be carried out.
The input data for determining the overall financial health of the
association XYZ are given in Table 1.

Table 1: Selected accounting indicators of the model association
XYZ between 2012 – 2017 (v CZK)

Accounting

period

2012

2013

2014

2015

2016

2017

Revenues

3,782,922 3,827,332 4,651,051 5,800,337 7,288,916 3,782,922

Expenditure 3,336,552 3,475,784 4,329,146 5,506,796 6,081,950 3,336,552

Tangible

assetss

365,236

331,190

298,938

268,478

690,427

365,236

Cash in hand

Cash on

current

account

Inventories

645,283

631,098

694,339

663,785

799,882

645,283

Payables

464,267

589,582

576,919

766,297

541,166

464,267

Other assets

Liabilities

including

credits and

loans

352,204

498,938

91,975

32,153

417,811

352,204

Reserves

Wages

878,058

629,813

634,811

701,431

928,500

878,058

Depreciation

34,044

32,252

30,460

141,323

Source: Authors.

After assessing the overall financial health of the model
association XYZ, the value of its inventories, low-value tangible
assets, financial assets, receivables and liabilities will be
determined using the asset-based valuation method.

The inventories of the association XYZ will be valued on the
basis of the purchasing cost specified in the list of inventories.
For the valuation of low-value tangible assets, so-called
amortisation scale is used, which expresses the decrease in the
assets value in percentage depending on the length of its use
(age). Amortisation scale of low-value tangible assets is shown
in Figure 1.

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