Intansible Assets Accountins Practices in Infosys Teclnnolosies Ltd- a Case Study

Abstract

This study examines the intangible assets accounting practices in Infosys Technologies Ltd by computing four important measures namely; Economic Value Added, Market Value Added, Brand Value and Total Shareholders Return and the variations of these four important indicators during the period from 2002-03 to 2008-09. The company possesses a very good image in the capital market and the investors are willing to pay more for its shares due to its positive growth in Economic Value Added (EVA), Market Value Added (MV A), Total Shareholders Return (TSR) and Brand Value over the years. The study has revealed that Infosys Technologies Ltd has been performing well in terms of generating wealth in excess of what was expected by the shareholders and earning an adequate return to compensate shareholders for the risk taken. The TSR is very encouraging and carries a good message to the shareholders through satisfaction of their expectations. The Company has acquired a good quantum of Brand value as its brand earning in the market is very attractive. The practice of disclosure of intangible accounting parameters in the Annual Reports of the Company has definitely attracted public interest and acts as a confidence building measure in the corporate world. The study suggests that the Company should undertake detailed analysis to identify the causes of decrease in MV A and TSR in the last two years of the study period and formulate its strategy to combat the situation and to add to its value creation activities.