Protecting your assets

Capitalizing on intellectual property, understanding the effect of expensing options, and reviewing privacy and security issues

Capitalizing on Innovation

Licensing is big business, and according to Ted Levalliant, the most significant business method of today’s economy. Transfer pricing he considers the most significant tax method of today’s economy. Capitalizing on Innovation: Licensing and Transfer Pricing for Canada’s New Economy argues that licensing and transfer pricing, when applied in tandem, have unparalleled potential in the new economy.

Capitalizing on Innovation explains how to maximize success in licensing patents, trademarks, copyright, know-how and other intellectual property through the development and implementation of licensing programs that facilitate the licensing of innovation in the new economy effectively, both domestically and globally.

Building on effective licensing strategies and examples, the book then demonstrates how to license competitively by means of transfer pricing strategies, to maximize licensing success and profitability in the new economy.

By Ted Levalliant. Published by Ditronix Press. For more information visit www.levalliant.com.

Expensing options

The U.S. Financial Accounting Standard Board’s decision to agree in principle to require public companies to expense stock options has created a renewed interest in how investors might react to such a move. Though many suggest such a move would offer a more accurate picture of a company’s financial results, some suggest that it would lead to lower shareholder value and reflect in the company’s stock price.

However, a new study, published in the Fall 2003 issue of Ernst & Young’s CrossCurrents, suggests that expensing options has in fact no significant impact on share price. The study, titled “Expensing of Options: What do the Markets Say?”, examined 140 companies who, between July 8, 2002, and January 16, 2003, publicly announced their intention to change their accounting policies and start expensing stock options. This included such noteworthy firms as Washington Post Company, Scotts, Chubb Corp., Bank of New York, and Goldman Sachs Group.

The results of the study revealed that the average abnormal share reaction to an expensing announcement was only +0.02% over a three-day window. This was considered remarkably negligible, and “statistically impossible to distinguish from zero.”

To read the full text of the study, visit www.ey.com.

The Security-Privacy Paradox

A joint paper released in August 2003 by Information and Privacy Commissioner Ann Cavoukian and Deloitte & Touche was published to provide corporate executives with suggestions for developing strategies for information security and privacy protection.

The Security-Privacy Paradox: Issues, Misconceptions and Strategies, examines the complex and often misunderstood relationship between the disciplines of information security and privacy protection.

The paper sets out to clarify the relationship between security and privacy in managing networked work environments. The paper:

• Describes and illustrates major characteristics, points of difference and areas of overlap between information security and privacy protection.
• Addresses issues and misconceptions that can lead to wasted money, time, effort, conflict and inappropriate measures and programs.
• Recommends and prioritizes business, organizational and technical approaches that are cost-justifiable and can be beneficial in reaching regulatory compliance.

The paper cites examples of approaches that work, as well as those that have failed. It also offers 16 key steps for smart businesses to follow in handling this sensitive issue.

For more information visit www.deloitte.ca.

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