Thesis Synopsis

Name Phone No Email Address Course To Which Admitted : Month & Year Of Admission : Place Of Study Center : Thesis Topic Specialization Area : : : : : IIPM/PGP/SS/11-13 MAY-2011 IIPM - AHMEDABAD IMPACT OF INTANGIBLE ASSETS ON MARKET VALUE: A CASE BASE STUDY (IT INDUSTRY INDIA) CORPORATE FINANCE

Introduction:
In today's highly competitive economic, intangible assets are creating value for productive companies, but challenges faces accounting standards about measuring and reporting these assets. Present study aims to analyze the intangible assets and market value relationship in IT (Information Technology) industry of India. Therefore, financial information of mentioned test case companies (5 major companies of IT in India) collected from year 2003 to 2013. Pooled/Panel regression method and F-Limer, Hausman and Levin Lin Chu tests used to analyze data. Test results showed that reported intangible assets have significant positive relation with market value these companies in National Stock Exchange as in IT industry of India. It seems an increase in intangible assets leads to an increase in market value of company in this industry. Also, result shows that there is positive and meaningful relation between abnormal earnings and market value in IT industry of Tehran Stock Exchange. The purpose of this research is to investigate the impact of intangible assets on firms competitive advantage and market value. Moderated Regression Analysis (MRA) is used for the data analysis. Data is drawn from companies listed in National Stock Exchange. MRA finds intangible assets have a significant impact to firms competitive advantage and market value. Furthermore, the intensity of the impact in IT industry will be discovered against other industries. The industrial type however, only takes a pure moderating role.

Research Objective
Research objective is based on predefined hypothesis. Hypothesis would be tested by analyzing the data. RESEARCH HYPOTHESIS: In the present study, a main hypothesis proposed as follows to achieve the research objectives based on research questions. The hypotheses examined for all IT firms: Main hypothesis: There is a significant positive relationship between intangible assets and the market value of firms of IT Industry in India.

Research Methodology:
VARIABLE: We need to define variables used in this study before proceeding to the methodology. A. Independent Variable: In this study, the independent variable is the annual identifiable intangible assets of the firms that extracted from annual audited financial statements. Identifiable intangible assets are the sum of reported intangible assets according to accounting standards of the firm (net of amortization and goodwill). B. Dependent Variable: The dependent variable is the market value of the firm that calculated by multiplying the price of each share on the last day of the fiscal year and the number of shares in the same year. C. Control Variables: Some of observable features of the firm will considered as control variables to control other effective factors contributing the market value of the firm. Therefore, operating assets, operating liabilities, financial assets, financial liabilities, the inflation rate, normal and abnormal operating earnings used as control variables.

STATISTICAL POPULATION: The statistical population of firms is five major IT companies listed on the National Stock Exchange (NSE). Sampling Method and Sample Size In this study, sampling does not carry out; but the statistical population of the study is five major IT companies, namely the firms listed on the National Stock Exchange are limited based on the following criteria: Given the study period (from early 2003 to late 2013) and considering the required information for a year before the examined year, the firm must be listed on the National Stock Exchange (NSE) before 2002 and the required information must be available. In order to increase comparability and integration of the selected firms, the financial year should be to the end of March of each year. The firm should not altered activity or financial year change during the study period (2003 to 2013). The selected firms must be IT (Information Technology) firm to achieve similarity in terms of items and their classification in the financial statements. After acquiring the sample size requirements, the sampling size reached to 5 samples. The data related to the years 2003 to 2013 collected for these firms. DATA COLLECTION METHOD: In this study, the desk study used to collect data and information. For the desk study, theoretical principles of the research collected from specialized books and journals available in internet. Based on the definitions of variables and the measurement methods, the required data for this study include some accounting items extracted from the audited financial statements of the

firms. Accordingly, the required data for the research collected through data collection, documents, and sample firms by referring to the financial statements, explanatory notes, weekly reports, Stock Journal, Library and the website of National Stock Exchange (NSE) as well as using the comprehensive statistic software of SPSS.

METHODS FOR DATA ANALYSIS AND HYPOTHESIS TESTING: Several statistical methods were used which will be described in more detail. In this study, following data collection, the descriptive statistics of the variables are calculated. These statistics include the mean, median, standard deviation and other required information. The most important statistical tests of this study include the Limer F -test, Houseman test and Levin, Lin and Chu test. The significance of the models and assumptions of regression including independence and normality of errors, the normality of the dependent variable and linearity had studied through these tests. The collected data initially was stored in a database. Then, data was transferred EXCEL and SPSS-16 for analyzing the data and their results.

Limitation of the Study:

RESEARCH LIMITATIONS: Some of the major obstacles in the way of conducting this study were as follows: 1 If information of any big IT firm is found unavailable then it would be removed of the sample. 2 Value of goodwill generated by brand name of company is not examined under any value relevance factor from the financial statements of the firm. It is not justified from any accounting standards which lead to elimination of goodwill from the model.

Books Referred:
Barth, M.E., W.H. Beaver and W.R. Landsman, 2001. The Relevance of the Value
Relevance Literature for Financial Accounting Standard Setting: Another View, Journal of Accounting and Economics, 31(1-3): 77- 104.

Claire Eckstein, 2004. The measurement and recognition of intangible assets: then and
now, Accounting Forum, 28: 139-158.

 Goodwin John, Kamran Ahmed, 2006. Longitudinal value relevance of earnings and intangible assets: Evidence from Australian firms, Journal of International Accounting, Auditing and Taxation, 15(1): 72-91.

Horrigan, J., 1966. The Determination of Long-Term Credit Standing with Financial Ratios, Journal of Accounting Research, 4(3): 44-62.

Lev, B., 1989. On the Usefulness of Earnings and Earnings: Lessons and Directions from
Two Decades of Empirical Research, Journal of Accounting Research, 27: 153-202.

Justification of Choosing the Topic:

Choosing something from corporate finance would be a practical study that helps me to see things in real perspective. It can also add value in my resume while moving my career in core financing companies. It become very important for an MBA to know how to utilize studies streamline in making job profile strong. The brand name of IT major player itself is a asset and valuing these asset would be a remarkable job in thesis work. IT is the only sector which has good image outside country.