CONCEPT OF “HIDDEN ASSETS” AND METHODOLOGICAL BASES FOR THEIR ASSESSMENT

##plugins.themes.bootstrap3.article.main##

##plugins.themes.bootstrap3.article.sidebar##

  Borys Burkynskyi

  Valeriy Goryachuk

  Julia Nazarenko

Abstract

To assess the prospects of an enterprise and plan its activities, it is very important to know what assets it has, including hidden assets. Today, there is no single understanding of this concept. Some researchers attribute this to an underestimation of the company’s assets, others – to a lack of accounting for assets, or to insufficient use of assets. This is the result of applying various methodological approaches and insufficient research of this concept. On the ground of a methodological approach based on the identification of generic concepts and essential features, a generalized definition of the concept of “hidden assets” is proposed. These are assets, value of which on the company’s balance sheet is undervalued compared to their real value, or which are not reflected in the balance sheet, or which are underutilized and which are real assets, and which are capable to provide a competitive advantage or economic benefit. This definition of the concept of “hidden assets” allows to combine different existing points of view on this concept and to look at the capital of an enterprise in a broader context. The difference between the concepts of “hidden assets” and “accounted assets” from the point of view of law is considered separately. Assets that are recorded in the balance sheet belong to the enterprise based on ownership rights. As for hidden assets, as a rule, the enterprise in relation to them has the right to use only. Firstly, this applies to the leased fixed assets, human capital (use of time, knowledge and skills of specialists). In other words, the right to use is of crucial importance. In this case, the assets of the enterprise are considered as a set of rights to receive economic benefits. With such a broad view, the components of the hidden capital of an enterprise can be identified. Analysis of existing methodological approaches to the assessment of hidden assets has shown that they have significant methodological shortcomings and difficulties in applying and collecting the necessary initial data. Methodological bases for estimation of hidden assets are proposed based on the defined concept of “public value of an enterprise” as the sum of all assets used by an enterprise to create gross value added. Calculations have shown that the average share of hidden assets of Ukrainian enterprises in the period from 2012 to 2018 in the total volume of all assets is 33.7 %, and by type of economic activity from 14.3 % in construction to 70.1 % in agriculture. Hidden assets are the missing link in determining the level of capitalization of an enterprise. All other things being equal, the difference in the level of economic development of enterprises can be explained by differences in the volume and structure of their hidden assets. Hidden assets can be the key to creation of an enterprise’s development strategy.

How to Cite

Burkynskyi, B., Goryachuk, V., & Nazarenko, J. (2020). CONCEPT OF “HIDDEN ASSETS” AND METHODOLOGICAL BASES FOR THEIR ASSESSMENT. Baltic Journal of Economic Studies, 6(5), 54-63. https://doi.org/10.30525/2256-0742/2020-6-5-54-63
Article views: 28 | PDF Downloads: 27

##plugins.themes.bootstrap3.article.details##

Keywords

enterprise, Ukraine, types of activities, capital, social value, structure

References

Bryl, L., & Truskolask, S. (2015). The intellectual capital effectiveness and enterprises’ performance-empirical study of Polish listed companies using VAIC method. Managing Intellectual Capital and Innovation for Sustainable and Inclusive Society: Managing Intellectual Capital and Innovation; Proceedings of the MakeLearn and TIIM Joint International Conference 2, ToknowPress.

Burkynskyi, B., & Horiachuk V. (2014). Kapitalizatsiia ekonomiky rehioniv Ukrainy [Capitalization of the economy of the regions of Ukraine]. Odesa: ІPREED NANU.

Chukhrai, N. (2012). Stratehichne upravlinnia pidpryiemstvom cherez vykorystannia “prykhovanykh aktyviv” [Strategic management of the enterprise through the use of “hidden assets”]. Voctochno-evropeiskii zhurnal peredovylh tekhnologii “Integrirovannoe strategicheskoe upravlenie, upravlenie proektami i programmami”, vol. 1/13(55), pp. 8–11.

Fijałkowska, J. (2014). Value Added Intellectual Coefficient (VAIC™) as a Tool of Performance Measurement: 15(1), 129–140. Available at: https://content.sciendo.com/view/journals/eam/15/1/article-p129.xml.

Fisher, I. (1927). The Nature of Capital and Income. New York, 52.

Forte, W., Matonti, G., Tucker, J. & Nicolo, G. (2017). MtB versus VAIC in measuring intellectual capital: Empirical evidence from Italian listed companies. 13th Interdisciplinary Workshop on Intangibles and Intellectual Capital Value Creation, Integrated Reporting and Governance, Ancona, Italy, September 21–22, 2017, Università Politecnicadelle Marche, Ancona, Italy, 21-22 September 2017. Università Politecnicadelle Marche, Ancona, Italy: European Institute for Advance Studies in Management. Available at: http://eprints.uwe.ac.uk/33500.

Golovchanskaia, E., & Strelchenia, E. (2015). Genezis osnovnykh podkhodov I metodoc otcenki intellektualnykh resursov [Genesis of the main approaches and methods for assessing intellectual resources]. Voprosy innovacionnoj jekonomiki, vol. 5(4), pp. 267–286.

Hayes, A. (2020). Q Ratio – Tobin’s Q. Available at: https://www.investopedia.com/terms/q/qratio.asp.

INSIDERpro (2017). Skrytye aktivy [Hidden assets]. Available at: https://ru.insider.pro/terms/Skrytye-aktivy/.

Javornik, S., Tekavčič, M., & Marc, M. (2012). The Efficiency Of Intellectual Capital Investments As A Potential Leading Indicator International Business. Economics Research Journal, vol. 11(5), pp. 535–558.

Komarova, A., & Krupina, A. (2017). Intellektualnyi capital kak factor vneshnetorgovoi strategii kompanii [Intellectual capital as a factor in the company’s foreign trade strategy]. Rossijskij vneshnejekonomicheskij vestnik, vol. 12, pp. 113–122.

Koritckii, A. (2013). Vliianie chelovecheskogo kapitala na ekonomicheskii rost [The impact of human capital on economic growth]. Novosibirsk: NGASU (Sibstrin).

Lekarkina, N. (2017). Intellektualnyi capital v otcenke intellektualnoi sobstvennosti [Intellectual capital in the valuation of intellectual property]. Otsenka investitcii, vol. 1 (5), pp. 35–53.

Li, Z., Chen, Z., Lui, T.T.S., & Chu, S.K.W. (2016). The іmpact of Intellectual Capitalon Companies’ Performances: A Study Based on MAKE Award Winnersand Non-MAKE Award Winner Companies. International Conference on Knowledge Management, ICKM 2016, Vienna, Austria.

Lopatnikov L. (Ed.). (2003). Ekonomiko-matematicheskii slovar. Slovar sovremennoi ekonomicheskoi nauki. [Economic and mathematical dictionary: Dictionary of modern economic science]. Moskva: Delo. Available at: http://economic_mathematics.academic.ru/4136/%D0%A1%D0%BA%D1%80%D1%8B%D1%82%D1%8B%D0%B5_%D0%B0%D0%BA%D1%82%D0%B8%D0%B2%D1%8B.

Mohamed, I. (2017). Methods of Measuring Intellectual Capital and the Efficiency of Investment It: Advantages & Disadvantages. Analytical Comparative Study Imperial Journal of Interdisciplinary Research (IJIR), vol. 3(2), pp. 1083–1092. Available at: https://www.onlinejournal.in/IJIRV3I2/183.pdf.

Moiaosvita (2017). Shcho take aktyv: vyznachennia [What is an asset: definition]. Available at: http://moyaosvita.com.ua/finansu/shho-take-aktiv-viznachennya/.

Puliс, A. (2008). The Principles of Intellectual Capital Efficiency, a Brief Description. Zagreb. Available at: http://www.cik-hr.com/data/principles_2008.pdf.

Piketty, Т. (2014). Capital in the Twenty-First Century. Harvard University Press.

Shchepotev, A. (2011). Uluchshenie finansovoi otchetnosti putem vyiavleniia, otcenki i registratcii “skrytykh” i “mnimykh” aktivov i obiazatelstv [Improving financial reporting by identifying, assessing and recording “hidden” and “imaginary” assets and liabilities]. Available at: http://www.kodeks.ru/sovershenstvovanie_finansovoi_otchetnosti.html.

Smriti, N., & Das, N. (2017). Impact of intellectual capital on business performance: Evidence from Indian pharmaceutical sector. Polish Journal of Management Studies, vol. 15(1), pp. 232-243.

Sokolianskii, V., & Sysoeva T. (2015). Sravnitelnyi analiz metodov otcenki stoimosti intellektualnogo kapitala (chast 1) [Comparative analysis of methods for assessing the value of intellectual capital (part 1)]. Voprosy ekonomicheskikh nauk, vol. 4, pp. 107–111.

Stahle, P., Stahle, S., & Aho, S. (2011). Value added intellectual coefficient (VAIC): a critical analysis. Journal of Intellectual Capital, vol. 12(4), pp. 531–551. doi: https://doi.org/10.1108/14691931111181715.

Svanadze, S., & Kowalewska, M. (2015). The measurement of intellectual capital by VAIC method – example of WIG20. Online Journal of Applied Knowledge Management, vol. 3(2), pp. 36–44. Available at: http://www.iiakm.org/ojakm/articles/2015/volume3_2/OJAKM_Volume3_2pp36-44.pdf.

Sveiby, K.-E. (2010). Methods for Measuring Intangible Assets. Available at: https://www.sveiby.com/files/pdf/1537275071_methods-intangibleassets.pdf.

Viazemskaia, V. (n.d.). Skrytye aktivy v biznese [Hidden assets in business]. Available at: http://www.markint.ru/skrytye-aktivy-v-biznese-2/.