Management Decision

Constructing a definition for intangibles using the resource based view of the firm
Gerhard Kristandl Nick Bontis
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MD
45,9 Constructing a definition for
intangibles using the resource
based view of the firm
1510
Gerhard Kristandl
Department of Finance and Accounting,
Vienna University of Economics and Business Administration,
Vienna, Austria, and
Nick Bontis
DeGroote School of Business, McMaster University, Hamilton, Canada
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Abstract
Purpose – The purpose of this paper is to construct and propose a definition for intangibles derived
from the resource-based view (RBV) of the firm for use in academic research and practical applications.
Design/methodology/approach – Intangibles are defined as a subset of corporate resources. In
this paper, various definitions for intangibles are tested against the RBV framework.
Findings – The majority of definitions in the extant literature are (implicitly or explicitly) in
synchronization with the RBV. Thus, it is possible to find and propose a common definition for
intangibles.
Research limitations/implications – Some researchers argue that the field is still in its embryonic
stages and thus the concepts might still be too fresh in order to find a stable common definition.
Practical implications – The paper offers a conceptual lens through which one can clearly link
intangibles to strategy and offers a proposed definition of intangibles that incorporates a meta-review
of the literature.
Originality/value – The paper shows that it is in fact possible to accommodate various definitions
of intangibles under one common framework and propose a unified characterization.
Keywords Intellectual capital, Intangible assets, Resource management
Paper type Conceptual paper

Management Decision
Vol. 45 No. 9, 2007
pp. 1510-1524
q Emerald Group Publishing Limited
0025-1747
DOI 10.1108/00251740710828744
Introduction
Intangible assets have always been present in a company’s operations. The first
recorded mentioning of intangibles can be found in 1896 by Lawrence R. Dicksee, (Wu,
2005), and Kenneth Galbraith for the term intellectual capital in 1969 (Bontis, 1998). It
has only been in the last couple of decades that this field has skyrocketed into
prominence (Serenko and Bontis, 2004). The importance of disclosing information
related to intangibles has also grown significantly (Botosan, 1997; Bontis, 2003).
Research dealing with intangibles suffers from one fundamental problem: the lack
of common terminology. The applied concepts are all differently labelled and every
researcher or practitioner who develops a new definition wants to establish his own
terminology (Bontis, 2001). This academic dissent is a hindrance to research progress
and so far, there is no agreed-on definition (Sveiby, 1997; Bontis et al., 1999;
Andriessen, 2004; Mølbjerg-Jørgensen, 2006).
This paper is motivated by the definitional disagreement over the term intangibles
(and its related cousins intangible assets and intellectual capital). In the following
 sections, we will discuss the terms employed, present different negative and positive Constructing a
definitions, and attempt to derive a common characterization from the resource-based definition for
view perspective of the firm.
intangibles
Literature review
There is an abundance of definitions as to what intangibles exactly are, which is both
useful (i.e. an exhaustive array of terms encompasses the complex nature of the concept) 1511
and harmful (i.e. no consensus leads to confusion). It is unclear whether the primary
terms used are arranged in a synonymous or hierarchical manner, since neither literature
nor practice has managed to find a common and clear differentiation (WGARIA, 2005).
The main terms usually found in the literature that relate to intangibles (and their
relative Google count) are: intellectual property – 127M, intangible assets – 2.3M,
intellectual capital – 1.8M, intellectual assets – 394k, knowledge capital – 334k, and
knowledge-based assets – 44k. Because the field is still in its embryonic stages, many
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researchers continue to develop their own terminology because no one is willing to give
up one’s own nomenclature (Bontis, 1996, 2001). Habersam and Piber (2003) contend that
it will take a while until researchers are able to draw from a common terminology.
During the beginning of the major wave of intangible assets research in the mid-1990s,
many authors defined intangibles according to the following equation for intellectual
capital (Edvinsson and Malone, 1997):

Intellectual capital ¼ Market value 2 Book value:

According to Upton (2001) this is rather ill-defined. The equation states that the entire
difference of market value and book value can be attributed entirely to intellectual capital
and one is “done with the exercise” (Upton, 2001, p. 2). It seems apparent that the
decision-usefulness prerogative is failing at the definitional level. Habersam and Piber
(2003) support this notion by claiming that intellectual capital is not composed of just
objects in order to be added up. Defining the difference between market value and book
value as intellectual capital is flawed since this difference might be attributable to many
other factors (i.e. stock price fluctuations may occur because of issues not related to
intangibles at all). Garcı́a-Ayuso (2003) argues that there are many influential factors
apart from intellectual capital that can affect stock prices such as undervalued tangible
and financial assets, liabilities in stockholders’ equity, legal events, and timing issues
such as the January-effect (Garcı́a-Ayuso, 2003; Upton, 2001; Andriessen, 2004). Thus,
the aforementioned definition of intellectual capital as stated above is rather misleading
and not entirely comprehensive.
As a further extension, many authors rely on describing the nature of intangibles by
suggesting categorisations of intangibles and taxonomies within a larger concept. The
question “what are intangibles?” is often replaced by answering “what categories of
intangibles are there?”. This misses the point since by providing categories of
intellectual capital like human capital, structural capital and relational capital (Bontis,
2002; Choo and Bontis, 2002; Andriessen, 2004), one still does not know the
phenomenological characteristics of the term. It is like asking “what is a car?” and
giving the answer “sedans, convertibles, off-roaders, limousines and vans!” Ultimately,
one still has no idea what a car is. It seems logical to understand what we are dealing
with first, and then define the various possible components afterwards.
 MD When defining intangible assets, there seems to be an affinity for researchers to take
45,9 the negative approach (WGARIA, 2001). In other words, defining intangibles as what
they are not, namely tangible, leading to anti-definitions (Lev, 2001). Table I
summarizes the most common definitions to date.
As Johanson (2000) points out, the same intangibles could be interpreted in different
ways. Intangibles consist of objective facts, conscious cognitive interpretations, and
1512 unconscious interpretations. Therefore, although there might be a chance for a common
definition and classification of intangible assets and intangible investments for
accounting and statistical purposes, a common basis for intangible phenomena as
cognitive or unconscious structures and processes in a firm might be unlikely (Johanson,
2000). Firms may be regarded from two angles: from the product side, and from the
resource side (Wernerfelt, 1984, p. 171, calls it “two sides of the same coin”). Where the
former has been subject to mainly economic theory, the latter has some highly
compelling strategic implications in terms of competitive advantage and the use of
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resources in order to gain higher profits (Wernerfelt, 1984; Barney, 1991). Strategic
resources are a subset of a company’s resource portfolio (Wade and Hulland, 2004). This
renders the resource focus suitable for attempting a definition for intangibles. It makes
sense to use a general theory of the firm as a starting point in order to anchor the concept
of intangibles where it all happens: the company and its set of strategic resources.
The theory of the resource-based view of the firm (RBV) (Penrose, 1959; Wernerfelt,
1984; Barney, 1991; Barney et al., 2001) focuses on the latter. It generally states that a
firm is able to secure sustainable abnormal returns from their resources (including
static resources, dynamic capabilities, and knowledge; see Barney et al., 2001).
However, these resources need to be (Barney, 1991; Wade and Hulland, 2004):
.
Valuable. Firm resources need to be able to create sustainable value for a
company.
.
Rare. Resources need to be heterogeneously distributed across firms, and not
easily accessible to competitors; possessed by a low number of firms.
.
Inimitable. Or low imitability (Wade and Hulland, 2004) of resources in order to
protect them from being copied by competitors (Barney, 1991).
.
Non-substitutable (non-transferable). Competitors must not have equivalent
resources in order to substitute an otherwise inimitable resource.

The VRIN (valuable, rare, inimitable, non-substitutable) indicators show whether or

not a firm possesses these strategic resources, and how secure they are (i.e. high or low
resource position barrier, see Wernerfelt, 1984). Additional characteristics and
requirements for resources are:
(1) Appropriable. They should be able to earn rents exceeding the cost of the
resources (e.g. Wade and Hulland, 2004).
(2) Immobile. It should not be possible to acquire them on factor markets (Wade
and Hulland, 2004).
(3) They include all assets, capabilities, organizational processes, firm attributes,
information, and knowledge that a company may employ in order to increase its
performance (Barney, 1991), and are useful in reacting towards market’s
opportunities and threats (Wade and Hulland, 2004).
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Source Term Description

IAS 38 Intangible assets Non-financial assets without physical substance that are held for use in the production or
www.iasb.org supply of goods or services or for rental to others, or for administrative purposes, which are
identifiable and are controlled by the enterprise as a result of past events, and from which
future economic benefits are expected to flow
McMaster World Congress on Intellectual capital Intellectual capital consists of the study of innovation, knowledge management, new
Intellectual Capital technology, intangible assets, intellectual property, human capital, organizational learning,
worldcongress.mcmaster.ca and knowledge workers
NYU Stern – Intangibles Research Intangible assets Broad definition: intangibles are non-physical sources of probable future economic benefits to
Center an entity or alternatively all the elements of a business enterprise that exist in addition to
www.stern.nyu.edu/ross monetary and tangible assets
Narrow definition: intangibles are non-physical sources of probable future economic benefits
to an entity that have been acquired in an exchange or developed internally from identifiable
costs, have a finite life, have market value apart from the entity, and are owned or controlled
by the entity
Bontis (1996) Intellectual capital From capturing, coding and disseminating information, to acquiring new competencies
through training and development, to re-engineering business processes
Stewart (1997) Intellectual capital The sum of everything everybody in the company knows that gives the company a
competitive advantage in its marketplace
Roos et al. (1997) Intellectual capital The sum of the hidden assets of the company not fully captured on the balance sheet, and
thus includes both what is in the heads of organizational members, and what is left in the
company when they leave.
Edvinsson and Malone (1997) Intellectual capital The possession of the knowledge, applied experience, organizational technology, customer
relationships and professional skills that provide (a company, ed.) with a competitive edge in
the market
Sveiby (1997) Intangible assets Invisible assets that include employee competence, internal structure and external structure
Sullivan (1998) Intellectual capital Knowledge that can be converted into profits
(continued)
intangibles

intangibles
Selected definitions of
definition for

1513
Constructing a

Table I.
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MD
45,9

Table I.
1514
Source Term Description

Brooking (1998) Intellectual capital A term given to the combined intangible assets which enable a company to function,
consisting of market assets, intellectual property assets, human-centred assets and
infrastructure assets
Johanson (2000) Intangible Covering all long-term outlays by firms aimed at increasing future performance other than
investments by purchase of fixed assets
Blair and Wallman (2001) Intangibles Non-physical factors that contribute to or are used in producing goods or providing services,
or that are expected to generate future productive benefits for the individuals or firms that
control the use of those factors
Upton (2001) Intangibles Index scores, ratios, counts, and other information not presented in the basic financial
statements
Upton (2001) Intangible assets Assets that are neither tangible nor financial instruments; items that fail the definition of an
asset, but are important elements of business success, are merely non-financial information
Lev (2001) Intangibles A claim to future benefits that does not have a physical or financial (a stock or a bond)
embodiment
MERITUM (2002) Intangibles Non-monetary sources of probable future economic profits, lacking physical substance,
controlled (or at least influenced) by a firm as a result of previous events and transactions
(self-production, purchase or any other type of acquisition) and may or may not be sold
separately from other corporate assets
MERITUM (2002) Intellectual capital Embraces all kinds of intangibles, either formally owned or used, or informally deployed and
mobilized; it is more than the sum of the human, structural and relational resources of the
firm, but also how to employ them to create value (connectivity capital)
MERITUM (2002) Intangible assets Representing the set of intangibles or elements of IC, that are susceptible of being recognized
as assets in accordance with the current accounting model
Mølbjerg-Jørgensen (2006) Intellectual capital Defined from a philosophical background as knowledge about knowledge, knowledge
creation, and leverage into a (social or economic) value
 (4) They are heterogeneously distributed across companies (Barney, 1991). Constructing a
(5) The differences between the companies are stable over time (Barney, 1991). definition for
Homogeneously distributed and or unstable differences in resources do not provide a intangibles
company with sustainable abnormal returns (Barney, 1991). This holds true for stable
as well as dynamic markets (Barney et al., 2001; Fiol, 2001; Eisenhardt and Martin,
2000), where the ability to continuously change and adapt (and find opportunities to 1515
generate abnormal returns) is regarded as a firm resource. This is similar to the ability
to protect the resources and employ resources in a stable market such as human
capital, or organisational capital. A company is not necessarily required to secure
sustainable competitive advantages, but must be able to secure a constant path of
temporary advantages in a dynamic market (Fiol, 2001; Barney et al., 2001).
Figure 1 distinguishes between attaining a competitive advantage, and sustaining it
(Peteraf, 1993; Wade and Hulland, 2004) with the ex ante and ex post limits to competition.
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The former suggests limited competition for the then potential advantage, rendering the
resources to do so not exclusive, but available to all the competing firms. The resources
might be valuable, rare, and appropriate for the task in order to become a source for
competitive advantage, but they are not inimitable, non-substitutable, or immobile at this
point. This happens ex post, when companies manage to make an advantage hard to
imitate, difficult to substitute by other resources, and immobile (non-transferable).
The following section attempts to connect the (main) definitions from the literature
to the RBV, which does not only include intangibles, but also tangibles (Galbreath and
Galvin, 2004). The RBV, per se, does not distinguish between tangibles and intangibles.
However not all resources are equally important to performance, and the most

Figure 1.
RBV over time
 MD influential ones seem to be intangible (Barney, 1991; Galbreath and Galvin, 2004).
45,9 Consequently, both can be employed by a firm in order to gain strategic advantages
(Wade and Hulland, 2004). We therefore attempt to define intangibles as a subset of
strategic resources under the RBV, which comprises assets as well as capabilities. A
subset of resources under the RBV might be defined in terms of intangibles, indicating
that we might be able to come up with a first step towards a common definition. From
1516 an RBV point of view, competitive advantage is a result of employing strategic
resources, both assets and capabilities, to the sustainable benefit of a company. The
unique development of these resources might be a result of a company’s individual
portfolio of assets, both tangible and intangible, thus making it difficult to transfer or
trade (Wade and Hulland, 2004).

Definitions revisited
In an attempt to derive a common definition of intangibles from a resource-based view
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perspective, it is important to conduct an initial review of some of the more common

characterizations. For instance, Lev (2001) uses some of the terms synonymously,
claiming that they “refer essentially to the same thing: a non-physical claim to future
benefits” (Lev, 2001, p. 5). He claims that the terms “are widely used – intangibles in the
accounting literature, knowledge assets by economists, intellectual capital by
management, and intellectual property in the legal literature – but they refer
essentially to the same thing: a non-physical claim to future benefits” (Lev, 2001, p. 5).
Fincham and Roslender (2003) see a danger in the synonymous use of the terms. They
argue that this confusion may undermine the promotion of intangibles. The authors of
the MERITUM (2002) project apply the same arguments as Lev (2001). They argue that
intellectual capital originates from the “human resources literature”, whereas intangibles
come from an “accounting perspective” (Johanson, 2000, p. 59). Intangible assets as a
term is even more restrictive since it refers to the recognition-criteria of the current
accounting system (Fincham and Roslender, 2003; MERITUM, 2002) and often “does not
cover all components of intantibles” (Andriessen, 2004, p. 63). If one applies the definition
of intangible assets as stated by regulatory standard setters such as the IASB (or the
FASB), it is increasingly evident that one is referring to an item that can or can not be
presented in a balance sheet. This accentuates the confusion that already exists.
Ultimately, from most definitions reviewed in the extant literature, it can be determined
that there is no clearly agreed on hierarchical relationship between intangibles,
intangible assets and intellectual capital.

RBV and intangibles

Examining intangibles through the theoretical lens of the RBV of the firm is not a
straightforward task. Wade and Hulland (2004) state that even when the RBV is
applied in many different fields of research, it must not necessarily be applicable in all
of them. However, we claim that the RBV and intangibles can be positioned in a natural
hierarchy, since the latter connects to a company’s strategy, and both contribute to
sustained corporate performance and competitive advantages. This might not happen
directly, but within interactions of assets and capabilities, where the latter transform
the former into outputs of increased value (Wade and Hulland, 2004; Peppard and
Rylander, 2001; Rylander et al., 2000). Figure 2 shows how intangibles might be defined
as a subset of strategic resources according to the RBV.
 Constructing a
definition for
intangibles

1517
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Figure 2.
Intangibles and IC as a
subset of strategic firm
resources (RBV)

Figure 2 shows intangibles as a subset of a company’s strategic resources, which in

turn are a subset of its full resource portfolio. By slicing away resources with no
importance to strategic goals (which would concern a portion of tangible assets), we
arrive with a set of strategic firm resources. By continuing the logic above, if we slice
away all tangible resources which are of strategic importance, we arrive at intangibles.
The definition we are aiming for will follow down from the top resources to the
intangibles, delimiting with every step. The figure also shows the link to the first
criticised suggested structures of intellectual capital. Each structure can be tested
against the definition whether it can be defined within the RBV, or outside.
Notwithstanding, we do not attempt to test the suggestions for intangible
categorisation within this paper. At this level, the different points of view of as stated
above might add several dimensions. The reader might infer that among the non-VRIN
resources, there might be intangibles as well. However, we argue that intangibles that
are not able to create value, are not unique to a company (and thus can be employed by
a majority of firms in the same way), are easy to copy, and easy to substitute, are not
able to contribute to corporate performance and thus not important to a company. Such
resources would be either ignored, or discarded. Therefore, we arrive with a set of
corporate intangibles following VRIN characteristics.
Bearing this in mind, we now attempt to allocate definitions for intangibles from the
literature to the broader framework of the RBV. Its usefulness for defining intangibles
is largely dependent on the explicit recognition of “the characteristics and attributes of
resources that lead them to become strategically important” (Wade and Hulland, 2004,
p. 115). First, we compare the various definitions from selected sources with general
RBV attributes, and then test additional (exceeding) parts of the respective definitions
against them. If we find contradictory definitions of intangibles to the framework, we
drop them from the final definition.
 MD
Resource attribute Terminology
45,9
Ex ante limits to competition
Value Embedded value (MERITUM, 2002)
Rarity Not explicitly referred to
Appropriability Future economic benefits (Epstein and Mirza, 2005); future productive
1518 benefits (Blair and Wallman, 2001); probable future economic
benefits/business success (Upton, 2001); profits (Sullivan, 1998);
competitive advantage (Bontis, 1996; Stewart, 1997); competitive edge
(Edvinsson and Malone, 1997); claim to future benefits (Lev, 2001);
probable future economic profits (MERITUM, 2002); increasing future
performance (Bontis, 1998); value (Mølbjerg-Jørgensen, 2006)
Ex post limits to competition
Imitability Social complexity: customer relationships (Edvinsson and Malone,
1997; Bontis, 1998); relational/connectivity capital (MERITUM, 2002;
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Bontis, 2001)
Substitutability Implicitly by Edvinsson and Malone (1997) referring to a competitive
edge in the market, hinting at resources that are not accessible to
everyone
Mobility When control is defined as a hindrance to mobility and transferability
on a factor market, then: control (Epstein and Mirza, 2005; Blair and
Wallman, 2001; Upton, 2001; Edvinsson and Malone, 1997;
MERITUM, 2002). Transferability as it relates to human capital
Table II. turnover (Stovel and Bontis, 2002)
Resource attributes in
RBV and IC Source: Wade and Hulland (2004)

Table II shows which resource attributes within the RBV are met by the definitions
from Table I. Interestingly, not all of them are mentioned, but none are contradictory,
which allows us to believe that the selected researchers may not have explicitly stated,
but implicitly not out-ruled the missing attributes (e.g., the substitutability attribute,
where Edvinsson and Malone (1997) refer to a competitive edge in the market, which
may be a result from resources that are not accessible to other companies). The
mobility attribute on the other hand can be linked to the often-mentioned control
attribute. When control is defined as a hindrance to the mobility and transferability of
a resource, then a majority states this attribute.
Table III adds attributes too specific for the RBV, but tailored to intangibles. It is
clear that none of these attributes are contradictory to the resource attributes one level
higher. This makes it possible to add these attributes without contradicting the basic
RBV framework. As a last step, asset recognition criteria (for both US-GAAP and
IFRS) are added in order to move from intangibles to intangible assets. Tables I-III, as
well as the RBV framework and the literature investigated, allow for a testable
definition of intangibles. Based on this meta-review process, we propose the following
unified definition for intangibles:
Intangibles are strategic firm resources that enable an organization to create sustainable
value, but are not available to a large number of firms (rarity). They lead to potential future
benefits which cannot be taken by others (appropriability), and are not imitable by
competitors, or substitutable using other resources. They are not tradeable or transferable on
factor markets (immobility) due to corporate control. Because of their intangible nature, they
 Constructing a
Resource attribute Terminology
definition for
Non-physical Without physical substance (Epstein and Mirza, 2005; Upton, intangibles
2001; Brooking, 1998; Sveiby, 1997; Lev, 2001; MERITUM, 2002)
Non-financial Non-financial (Epstein and Mirza, 2005; Blair and Wallman, 2001;
Upton, 2001; Lev, 2001); non-monetary (MERITUM, 2002)
Outside financial statements Not represented in financial statements (Bontis, 1996; Upton, 1519
2001; Roos et al., 1997)
Context-dependent value Value contribution in combination with other factors
contribution (MERITUM, 2002; Bontis and Fitz-enz, 2002; Bontis et al., 2002)
Finite life Finite life (Upton, 2001)
Asset recognition
Linked to provision of products Production/services (Epstein and Mirza, 2005; Blair and
and services expected Wallman, 2001)
Identifiable Epstein and Mirza (2005); Upton (2001); MERITUM (2002) Table III.
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Result of past transactions Epstein and Mirza (2005); Upton (2001); MERITUM (2002) Additional attributes

are non-physical, non-financial, are not included in financial statements, and have a finite life.
In order to become an intangible asset included in financial statements, these resources need
to be clearly linked to a company’s products and services, identifiable from other resources,
and become a traceable result of past transactions.

A different point of view

At this point, we also add other related terms in the context of intangibles to the unified
definition presented above:
.
Intellectual property. Intangible assets with legal and contractual boundaries;
assets to which a company has property rights and whose ownership is granted
to them by law (Marr et al., 2002) such as patents, trademarks, registered designs,
and copyrights.
. Intangible resources. Intellectual property rights, trademarks or information
technologies, that can be measured at any time in a company due to their static
nature (MERITUM, 2002); Hall (1992) divides them into assets (trademarks,
patents, copyrights, registered designs, etc.) and skills (know-how, culture).
.
Intangible activities. Activities in a company for developing or acquiring new
intangible resources, increasing the value of existing intangible resources, or
evaluating and monitoring intangible activities (MERITUM, 2002).
.
Intangible investments. All new goal-oriented activities to a firm or disembodied
tools used by a firm, on a strategic and tactical level, during the reference period.
On the tactical level, they are aimed at a quantitative change or extension of
existing knowledge, while on the strategic level they are aimed at the acquisition
of completely new knowledge. They refer to services or output indicators of these
services that can be bought from third parties or produced for their own use, and
normally embrace a certain degree of risk. They include marketing,
technological, informational and organisational activities or tools. These
activities or disembodied tools have to be separately identifiable and
measurable in financial terms. The results are reflected by expected pay-off in
 MD the near future. They are assets concerning the stock of knowledge or power on
45,9 the market or strength of the internal organisation, having a useful life of more
than one year. These investment activities are measured by their expenditures,
occurring in the present. Purchases of small, disembodied tools or minor
activities, which are not capitalised, are considered expenditures on an
operational level and are included under current expenditures. Assets acquired
1520 through restructuring (such as mergers, take-overs, break-ups, split-offs) are
excluded (Statistics Netherlands, 1998, p. 9).

In summary, intangibles can be regarded from a process standpoint when discussing

resources and activities, a legal standpoint when discussing property rights, a
standard setting standpoint when thinking about recognition criteria, and from a
managerial standpoint when discussing strategic investments. Within the RBV, each
of these specifications are easily introduced to the framework.
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Goodwill versus intangibles

It is necessary to state that the broadly defined concept of intangibles is not to be
confused with the term goodwill (WGARIA, 2005). Goodwill contains some items that
are intangible and some that are not. Furthermore, goodwill is only recognised under
current regulation when a company is acquired (Wagenhofer, 2005). There is a final
price (after negotiations) within which goodwill resides and is valued (WGARIA, 2005).
Goodwill also does not comprise of intangibles being recognised in the balance sheet
(see Figure 3 for details).
As a result of the various viewpoints presented, we propose the following
hierarchical representation (see Figure 4).
Apparently, we note that there is overlap in this representation. However, we also
note that this figure should not be regarded as classifications of intangibles, but a mere
arrangement of conceptualizations.

Limitations
Swart (2006) argues that theoretical frameworks such as human capital theory or RBV
have added to the understanding of the sub-components of intangibles, however, such
frameworks do not clearly state what it is and how it contributes to corporate
performance. However, it is not the task of the aforementioned frameworks to provide a
manual on how to link intangibles to corporate performance, but to provide a
foundation for deriving and embedding intangibles in a much broader concept of what

Figure 3.
Definition of intangibles
versus goodwill
 Constructing a
definition for
intangibles

1521
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Figure 4.
Arrangement of terms
used

constitutes the firm. A company is not just made of intangible assets, and concepts
which do not heed this fact are prone to forget valuable synergies. As we have shown,
the RBV does indeed provide a useful conceptualization lens.
Another limitation of our paper lies in the relatively young age of the concept of
intangibles in general. With only three decades of research to draw on, the instability of
common definitions is a challenge. Furthermore, the empirical impact of intangibles is
not empirically known with certainty over the long-term (i.e. over 30 years). Although
we do assume that the nature of their impacts will still be evident and positive beyond
that time period.

Conclusion
This paper attempts to derive a comprehensive definition of intangibles for future
research. We show that it is possible to unify a characterization by first applying a
resource-based view of the firm, defining intangibles as a subset of strategic resources,
and then testing current definitions against this framework. It is even possible to
assign these definitions to different points of view. We believe that by using our
approach, a consensus is possible. Nevertheless, this paper is intended to be a first step
in triggering further discussions, so researchers and practitioners refer to the same
concepts when investigating the measurement, management, and disclosure of
intangibles. The alternative is to bask in the glory of our own personal definitions
while at the same time suffering from nomenclature regurgitation against untested
common criteria.
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Further reading
Abeysekera, I. (2006), “The project of IC disclosure: researching the research”, Journal of
Intellectual Capital, Vol. 7 No. 1, pp. 61-77.
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pp. 268-81.
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Style, Wiley & Sons, Chichester.
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Intangible Assets – Values, Measures, and Risks, Oxford University Press, New York, NY,
pp. 1-16.
Lev, B. and Zambon, S. (2003), “Introduction to the special issue”, European Accounting Review,
Vol. 12 No. 4, pp. 597-603.

Corresponding author
Gerhard Kristandl can be contacted at: gerhard.kristandl@gmx.at

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