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Intangible asset valuation

Financial

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Intangible asset valuations can be carried out in a number of ways. Intangible Business considers all approaches for all intangible asset valuations, including brand valuations, business valuations, share valuations, contract valuations, for valuing customer relationships, valuing shares, valuing patents and for all other intangible asset valuations. The most appropriate intangible asset valuation method is then selected for the specific asset and purpose. Generally there are three main approaches Intangible Business uses when valuing intangible assets:

1. Income valuation
Future earnings that are attributable to the brand or other intangible asset are forecast over its useful life and discounted to its net present value. This requires an appreciation of market trends, competitive dynamics, the nature of the intangible assets and their relationship with the consumer.

2. Market valuation
Transactions are analysed for comparability, including licensing arrangements which can be investigated to benchmark an appropriate royalty rate.

3. Cost valuation
The cost of recreating the intangible asset is considered alongside the historic cost of the initial creation.

Generally, Intangible Business uses the income valuation approach of the relief-from-royalty methodology for intangible asset valuation. This is because it is the most economically in-line with commercial reality and can be benchmarked most accurately, resulting in a valuation with as much objectivity as possible. The resulting brand values and intangible asset values can be used in a number of ways including: compliance with financial reporting standards such as IFRS, IAS and US GAAP, inter-company reporting, tax planning, ROI analysis, licensing arrangements, M&A, brand transactions, dispute resolution and investor relations.  

If you have any questions, or would like help valuing your intangible assets, please call us on + 44 (0)20 7089 9236 or send us an email.