• ISSN: 2010-023X (Print)
    • Abbreviated Title: Int. J. Trade, Economics and Financ.
    • Frequency: Quaterly
    • DOI: 10.18178/IJTEF
    • Editor-in-Chief: Prof.Tung-Zong (Donald) Chang
    • Managing Editor: Ms. Shira. W. Lu
    • Abstracting/ Indexing:  Crossref, Electronic Journals Library , EBSCO
    • E-mail: ijtef.editorial.office@gmail.com
IJTEF 2022 Vol.13(1): 7-11 ISSN: 2010-023X
DOI: 10.18178/ijtef.2022.13.1.715

The Discount Rate for The Valuations of Intangible Assets — Evidence from Taiwan’s Semiconductor Industry

Ming-Che Lu and Ting-Yu Chen

Abstract—This study attempts to link the discount rate of the intangible assets with patent rights, computer softwares, customer relations, trademarks, other intangible assets, and goodwill. By requiring the weighted average capital cost equal to the weighted average return on assets, the discount rate of the intangible assets can be estimated with the return on intangible assets. Since the characteristics of industry dominate the performance of intangible assets and Taiwan's semiconductor industry ranks as a global leadership, our study will focus on the semiconductor industry of Taiwan. The empirical results reveal that patent rights, computer softwares, other intangile assets, and goodwill are significantly relevant to the discount rate of the intangible assets in Taiwan’s semiconductor industry. Our findings provide deeply insights into the valuations of intangible assets.

Index Terms—Discount rate, valuation of intangible assets, weighted average cost of capital, weighted average return on assets.

The authors are with the Department of Accounting, Chaoyang University of Technology, Taiwan (Corresponding author: Ting-Yu Chen; e-mail: mclu@cyut.edu.tw, juichiencheno@gmail.com).

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Cite: Ming-Che Lu and Ting-Yu Chen, "The Discount Rate for The Valuations of Intangible Assets — Evidence from Taiwan’s Semiconductor Industry," International Journal of Trade, Economics and Finance vol.13, no.1, pp. 7-11, 2022.

Copyright © 2022 by the authors. This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).

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