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It is very difficult
to accurately determine the value of a firm's intangible assets.
How can the trademark of a bank or an insurance company be
valued based only on book value? The relevant stipulations in
Circular 79 of the Ministry of Finance are not appropriate or
well-grounded. In my opinion, the best solution to value an
SOE's intangible assets is to let these be determined by the
market. In other words, the intangible assets of a firm can be
accurately valued by public bidding for shares.
Mr. Nguyen Van Nghia, Officer in charge,
Enterprise Reform and Development Department, Office of the
Government
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 There
are still constraints in the way intangible assets are valued.
For example, during the equitization of some of our
subsidiaries, such as transportation and package production, the
authorities required us to value trademarks and other intangible
assets. But these subsidiaries do not have their own trademark,
nor use the trademark of the parent company's cement product. So
how, and on what basis, can we calculate a value?
Ms. Nguyen Thanh Ha, Head of the Specialist Committee,
SOEs Reform Group, Vietnam National Cement Corporation (VNCC)
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If intangible assets
are valued highly, their annual amortization cost will also be
high, and thus result in lower profits for the equitized
company. However, new investors in an equitized company expect
high dividends. Compared with other state-owned insurance
companies that are not required to amortize the cost of their
intangible assets, Bao Minh is therefore at a disadvantage in
terms of attracting shareholders.
Mr. Pham Xuan Phong, Deputy Managing Director,
Ho Chi Minh City Insurance Company (Bao Minh)
-
 Most
companies, including SOEs, have some intangible value (commonly
known as goodwill), over and above the net book value of their
assets. In many companies, the value of their intangible assets
is far greater than the value of their tangible assets.
Investors place a considerable amount of value on the quality of
management and their capacity to manage change, and to compete
effectively in the marketplace. Value is also placed on a
company's market share, product quality, manufacturing
standards, corporate governance, etc. All these factors make up
a business entity's intangible value. There are special
techniques to value intangible assets, and it is important to
choose the right technique. Another key role of a valuation
consultant is to help management understand this, and focus on
the key drivers of a company's value.
Mr. Kelvin Lee, Partner, Advisory,
Valuation and Strategy, PricewaterhouseCoopers, Vietnam
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