An evaluation methodology for the tangible and intangible assets of city-regions : the 6K1C framework

Together with hard and soft networks tangible and intangible regional assets play an important role in the knowledge-based development of competing city-regions. The aim of this paper, therefore, is to investigate the best ways of managing invaluable tangible and intangible assets of city-regions. The paper explores the importance of asset management of city-regions by giving special emphasis on their knowledge asset base. This paper develops and introduces a theoretical framework to conceptualise a new approach to articulate the strategic planning mechanism, so called the 6K1C framework. The 6K1C framework is part of the strategic planning process of continuous improvement of overall public sector performance. The framework provides a proactive check-list approach integrated for managing and harnessing tangible and intangible assets of the post-industrial city-regions.

Knowledge-based strategic planning: harnessing (in)tangible assets of city-regions

Purpose – The aim of this paper is to investigate the ways of best managing city-regions’ valuable tangible and intangible assets while pursuing a knowledge-based urban development that is sustainable and competitive. Design/methodology/approach – The paper provides a theoretical framework to conceptualise a new strategic planning mechanism, knowledge-based strategic planning, which has been emerged as a planning mechanism for the knowledge-based urban development of post-industrial city-regions. Originality/value – The paper develops a planning framework entitled 6K1C for knowledge-based strategic planning to be used in the analysis of city-regions’ tangible and intangible assets. Practical implications – The paper discusses the importance of asset mapping of cityregions, and explores the ways of successfully managing city-regions’ tangible/intangible assets to achieve an urban development that is sustainable and knowledge-based. Keywords – Knowledge-based urban development, Knowledge-based strategic planning, Tangible assets, Intangible assets, City-regions. Paper type – Academic Research Paper

Fair value accounting for non-current assets and audit fees: Evidence from Australian companies

We investigate the association between asset revaluations of non-current assets and audit fees, using a sample of ASX 300 companies from the years 2003–2007.We report that there is a significant increase in the audit fees paid when non-financial assets (PPEs, investment properties and intangible assets) are measured at fair values. Moreover, we provide evidence that an independent valuer or appraiser significantly weakens the positive association between asset revaluations and audit fees. Furthermore, companies whose noncurrent assets are revalued upwards and those that revalue their non-current assets upwards every year have significantly higher audit fees. Additional tests provide empirical evidence that the strength of corporate governance has a moderating effect on the level of audit fees. This study contributes to the ongoing debate on the role of fair value accounting. The findings suggest agency costs associated with fair value estimates may offset the benefits from the use of fair value accounting.

Small and medium enterprises sourcing software as a service – a dynamic perspective on IS capabilities

Software as a Service (SaaS) is a promising approach for Small and Medium Enterprises (SMEs) firms, in particular those that are focused on growing fast and leveraging new technology, due to the potential benefits arising from its inherent scalability, reduced total cost of ownership and the ease of access to global innovations. This paper proposes a dynamic perspective on IS capabilities to understand and explain SMEs sourcing and levering SaaS. The model is derived from combining the IS capabilities of Feeny and Willcocks (1998) and the dynamic capabilities of Teece (2007) and contextualizing it for SMEs and SaaS. We conclude that SMEs sourcing and leveraging SaaS require leadership, business systems thinking and informed buying for sensing and seizing SaaS opportunities and require leadership and vendor development for transforming in terms of aligning and realigning specific tangible and intangible assets.

Valuation of family firms : the limitations of accounting information

This conceptual paper explores the extent to which reported accounting information captures unique family firm decision-making and intangible asset factors that impact financial value. We review the family firm valuation-relevant literature and identify that this body of research is predicated on the assumption that accounting information reflects the underlying reality of family firms. This research, however, fails to recognise that current accounting technology does not fully recognise the family firm factors in the book value of the firm or the implications for long run persistence of earnings. Thus, valuation models underpinning the extant empirical research, which are predicated on reported accounting information, may not fully reflect the intrinsic value of family firms. We present propositions on the interaction between accounting information, family factors and valuation as a road map for future empirical research with a discussion of appropriate methodologies.

Business in troubled waters : does adverse attitude affect firm value?

This paper investigates the relationship between US MNCs' valuations and anti-Americanism in countries where MNCs' foreign subsidiaries are located. We find that MNCs suffer value-destruction when they enter markets where people express severe anti-Americanism. However, we uncover that geographic diversification into these high anti-Americanism countries significantly increases firm value if the MNC has high levels of intangibles such as technological know-how and marketing expertise. Our findings are consistent with the notion that the advantages from internalizing the cross-border transfer of intangibles are greater when barriers to competition are higher.

On the allocation of a takeover purchase price under AASB1013

The purpose of this paper is to document and explain the allocation of takeover purchase price to identifiable intangible assets (IIAs), purchased goodwill, and/or target net tangible assets in an accounting environment unconstrained with respect to IIA accounting policy choice. Using a sample of Australian acquisitions during the unconstrained accounting environment from 1988 to 2004, we find the percentage allocation of purchase price to IIAs averaged 19.09%. The percentage allocation to IIAs is significantly positively related to return on assets and insignificantly related to leverage, contrary to opportunism. Efficiency suggests an explanation: profitable firms acquire and capitalise a higher percentage of IIAs in acquisitions. The target's investment opportunity set is significantly positively related to the percentage allocation to IIAs, consistent with information-signalling. The paper contributes to the accounting policy choice literature by showing how Australian firms make the one-off accounting policy choice in regards allocation of takeover purchase price (which is often a substantial dollar amount to) in an environment where accounting for IIAs was unconstrained.

Achieving better stewardship of major infrastructure assets through configuration of governance arrangements utilising Stewardship Theory

Major infrastructure assets are often governed by a mix of public and private organizations, each fulfilling a specific and separate role i.e. policy, ownership, operation or maintenance. This mix of entities is a legacy of Public Choice Theory influenced NPM reforms of the late 20th century. The privatization of the public sector has resulted in agency theory based ‘self-interest’ relationships and governance arrangements for major infrastructure assets which emphasize economic efficiency but which do not do not advance non-economic public values and the collective Public Interest. The community is now requiring that governments fulfill their stewardship role of also satisfying non-economic public values such as sustainability and intergenerational responsibility. In the 21st century governance arrangements which minimize individual self-interest alone and look to also pursue the interests of other stakeholders have emerged. Relational contracts, Public-Private Partnerships (PPP’s) and hybrid mixes of organizations from the state, market and network modes (Keast et al 2006) provide options for governance which better meet the interests of contractors, government and the community there is emerging a body of research which extends the consideration of the immediate governance configuration to the metagovernance environment constituted by hierarchy, regulation, industry standards, trust, culture and values. Stewardship theory has reemerged as a valuable aid in the understanding of the features of governance configurations which establish relationships between principal and agent which maximize the agent acting in the interests of the principal, even to the detriment of the agent. This body of literature suggests that an improved stewardship outcome from infrastructure governance configurations can be achieved by the application of the emerging options as to the immediate governance configuration, and the surrounding metagovernance environment. Stewardship theory provides a framework for the design of the relationships within that total governance environment, focusing on the achievement of a better, complete stewardship outcome. This paper explores the directions future research might take in seeking to improve the understanding of the design of the governance of major, critical infrastructure assets.

Sustainable infrastructure assets : capability for infrastructure capacity management

Building for a sustainable environment requires sustainable infrastructure assets. Infrastructure capacity management is the process of ensuring optimal provision of such infrastructure assets. Effectiveness in this process will enable the infrastructure asset owners and its stakeholders to receive full value on their investment. Business research has shown that an organisation can only achieve business value when it has the right capabilities. This paradigm can also be applied to infrastructure capacity management. With limited access to resources, the challenge for infrastructure organisations is to identify and develop core capabilities to enable infrastructure capacity management. This chapter explores the concept of capability and identifies the core capability needed in infrastructure capacity management. Through a case study of the Port of Brisbane, this chapter shows that infrastructure organisations must develop their intelligence gathering capability to effectively manage the capacity of their infrastructure assets.