Intangible Assets as Competitive Advantage Generators

Recognition and Diagnosis of Intangible Asset Performance

On this occasion, we will discuss how brands focused on hyper-growth in their businesses view intangible assets as a source of continuous value generation. Generally, businesses possess different intangible assets, and determining their value and impact on business growth can be complex on their own. Therefore, it is necessary to diagnose which assets allow for short-term revenue generation and those in which investments yield medium-term returns. This ensures alignment with the business strategy or supports competitive advantages.

Growth Levers and Competitive Advantage Generators

The financial valuation of a Technology, Patents, Brand, etc., must be based on verifiable data that provides certainty about its current and future value, as well as the elements that contribute to that value. To achieve this, a formal valuation of the asset is necessary to identify the factors that trigger its value. This enables Marketing, Service, and Sales teams to know the 'right buttons to press.

Economic Value Activation

Once we have started working on leveraging and growing its value, the next step is the process by which the value of the intangible asset is capitalized and considered in the total value of the business. For example, a brand or technology valuation certified by a public appraiser allows for the recognition and addition of economic value to the financial statements.

Companies with the highest value in intangible assets

The companies with the highest value today are those focused on the internet, software, and technology sectors, indicating a strong reliance on intangible assets.

Microsoft stands out as one of the most significant companies in terms of estimated total intangible value. This is attributed in part to its Microsoft Teams application, which has become indispensable in organizations worldwide, once again showcasing Microsoft's ability to innovate and deploy at scale. Microsoft is heavily investing in tailored solutions for businesses.

Similarly, Apple has built a closed ecosystem encompassing hardware, software, and services. The interconnectedness of devices (iPhone, iPad, Mac, Apple Watch, etc.) with operating systems like iOS and macOS, along with services like iCloud, creates a seamless and consistent user experience.

Benefits of Capitalization

By acquiring and capitalizing an intangible asset, solidity is provided to your financial statements, useful for tender processes or commercial loans. There are other benefits, such as:

1. Capitalizing the asset leads to clearer and better-projected financial statements. This provides a precise view of the economic situation and facilitates strategic decision-making.
2. The value of the intangible asset determines the monthly VAT benefits, either directly for crediting or for offsetting with other taxes.
3. Deduction through amortization has a direct impact on the annual Income Tax base, adjusting taxable income and consequently affecting the entity's tax obligation.

Intangible Asset Utilization Quiz

• Do I have a clear understanding of all the intangible assets in the business?
• Am I leveraging multiple of these assets?
• Are we leveraging all of them in the 2024 business strategy?
• Are marketing investments in activating key factors of our intangible assets increasingly converting into sales?
• Have we added their economic value to the financial statements in recent years?

If you answered 'no' to more than 2 questions, your intangible assets are either turned off or non-existent. In the case of not having them, it's essential to create them and begin envisioning the future of the business.