Date of Award


Degree Type

Doctoral Dissertation

Degree Name

Doctor of Business Administration (DBA)


Jack Welch College of Business

Dissertation Supervisor

Dr. Lucjan Orlowski

Committee Member

Dr. Linda Hughen

Committee Member

Dr. Carlos F. Liard-Muriente


This paper examines the relationship of the relative weightings of intangible assets recorded in purchase price allocations by industry based upon a weighted average rate of return (“WARA”) framework to determine if there is a statistical relationship between the value weightings and discount rates and if benchmarking the value weightings to industry data can be used as a reliable indicator of reasonableness. Both the WARA process and benchmarking assume that the relative values of intangibles impact the discount rate selected or that there is commonality in the industry ratios. Intuitively, the use of WARA and Benchmarking for financial reporting both make sense. Yet, based upon private company data examined, the relative value weightings of intangible assets generally do not have a relationship with the implied discount rate from private company transaction data and benchmarking does not support the values. Although these findings note the current WARA process is flawed, it is established practice for financial reporting. Yet, the development of WARA can be improved by using market data and assessing the variation to support a selection of discount rates in conformity with accounting guidance. Consequently, this paper outlines the problem with the WARA methodology, as well as a policy recommendation to improve the process.

JEL Classification

G12, G32, G34, M41, M42

Creative Commons License

Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.



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