Using Hybrid Classifiers to Conduct Intangible Assets Evaluation

Yu-Hsin Lu and Yu-Cheng Lin
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Yu-Hsin Lu: Department of Accounting, Feng Chia University, Taichung, Taiwan
Yu-Cheng Lin: Department of Banking and Finance, National Chi Nan University, Nantou, Taiwan

International Journal of Applied Metaheuristic Computing (IJAMC), 2016, vol. 7, issue 1, 19-37

Abstract: Traditional financial reporting usually ignores intangible assets, even though these assets play an increasingly important role in today's knowledge-based economy. As such, the valuation of intangible assets, while typically overlooked in traditional reporting, has nonetheless garnered widespread interest. This paper uses data-mining technologies to identify important valuation factors and to determine an optimal valuation model. In the feature selection process, the paper focus on three methods, namely, decision trees, association rules, and genetic algorithms in data mining, to identify important valuation factors. The results show that decision trees have approximately 75% prediction accuracy and select seven critical variables. In the prediction process, the paper constructs and compares many kinds of evaluation and prediction models. The results show that hybrid classifiers (i.e., k-means + k-NN) perform best in terms of prediction accuracy (91.52%), Type I and II errors (11.17% and 7.15%, respectively), and area under ROC curve (0.908).

Date: 2016
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