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Prof. Hu Jiayin: Assessing Data Asset Appraisal Guidelines

Nov 24-2023   



Data Asset Appraisal Guidelines went into effect on October 1. It was drafted by China Appraisal Society under the guidance of the Ministry of Finance. In a media commentary, Prof. Hu Jiayin of the NSD believed the guidelines will facilitate the formulation of a value appraisal mechanism for data assets and provide feasible infrastructures for digital assets’ integration into balance sheets, trading, circulation, and relevant maneuvers. Overall, she believed the guidelines hold great significance for corporate financing and economic development in the digital age. Prof. Hu is NSD Assistant Professor and a research fellow of PKU Institute of Digital Finance.

 

Similar to real assets, data assets are defined with close reference to their potential for creating economic value. According to the guidelines, data assets are data resources that are legally owned or controlled by specific entities, can be measured in currencies, and can directly or indirectly generate economic benefits. Prof. Hu noted that the guidelines do not delve into the value of data assets along the temporal dimension. Time-sensitiveness, she said, is a key differentiator between data assets and other types of assets and therefore deserves in-depth explanations. Current discussions on data policy tend to overlook data’s dynamic evolutionary features, she pointed out. In fact, data takes on the characteristics of half-life period. Understanding the time-sensitiveness of data will allow for more accurate appraisal of data value, she said.

 

The guidelines marked the growing importance of data assets. Instead of using ‘light assets’ and ‘heavy assets’ to make distinction among firms, it might become more relevant to use ‘data assets’ and ‘real assets’, said Prof. Hu, adding that this will have major influence on corporate valuation, startup financing, and even international competition in the digital age. The affirmation of data assets’ values also leads to some questions: can the government tax data trading and digital assets? can financial institutions accept data assets as collaterals? A positive answer to the latter question might benefit tech firms or platforms, but might result in falsification of asset value, asset price bubbles, and financial risks. All these deserve prudent considerations of the regulatory authorities and call for the building and innovations of a multi-leveled financial system.

 

The implementation of the guidelines connects well with the forefront of international data economy, said Prof. Hu. It also means that the regulatory authorities, while paying attention to the ownership and privacy of data, are shifting the focus to the development and utilization of data resources and making efforts to strengthen operability therein.

 

Prof. Hu Jiayin: Assessing Data Asset Appraisal Guidelines

Nov 24-2023   



Data Asset Appraisal Guidelines went into effect on October 1. It was drafted by China Appraisal Society under the guidance of the Ministry of Finance. In a media commentary, Prof. Hu Jiayin of the NSD believed the guidelines will facilitate the formulation of a value appraisal mechanism for data assets and provide feasible infrastructures for digital assets’ integration into balance sheets, trading, circulation, and relevant maneuvers. Overall, she believed the guidelines hold great significance for corporate financing and economic development in the digital age. Prof. Hu is NSD Assistant Professor and a research fellow of PKU Institute of Digital Finance.

 

Similar to real assets, data assets are defined with close reference to their potential for creating economic value. According to the guidelines, data assets are data resources that are legally owned or controlled by specific entities, can be measured in currencies, and can directly or indirectly generate economic benefits. Prof. Hu noted that the guidelines do not delve into the value of data assets along the temporal dimension. Time-sensitiveness, she said, is a key differentiator between data assets and other types of assets and therefore deserves in-depth explanations. Current discussions on data policy tend to overlook data’s dynamic evolutionary features, she pointed out. In fact, data takes on the characteristics of half-life period. Understanding the time-sensitiveness of data will allow for more accurate appraisal of data value, she said.

 

The guidelines marked the growing importance of data assets. Instead of using ‘light assets’ and ‘heavy assets’ to make distinction among firms, it might become more relevant to use ‘data assets’ and ‘real assets’, said Prof. Hu, adding that this will have major influence on corporate valuation, startup financing, and even international competition in the digital age. The affirmation of data assets’ values also leads to some questions: can the government tax data trading and digital assets? can financial institutions accept data assets as collaterals? A positive answer to the latter question might benefit tech firms or platforms, but might result in falsification of asset value, asset price bubbles, and financial risks. All these deserve prudent considerations of the regulatory authorities and call for the building and innovations of a multi-leveled financial system.

 

The implementation of the guidelines connects well with the forefront of international data economy, said Prof. Hu. It also means that the regulatory authorities, while paying attention to the ownership and privacy of data, are shifting the focus to the development and utilization of data resources and making efforts to strengthen operability therein.