IP Valuation and Intangible Asset Valuation
Because businesses are often worth far more than the sum of their hard assets and working capital, a crucial aspect of Appraisal Economics’ valuation services involves IP valuation, also known as Intellectual Property valuation. These assets must be valued for purchase price allocation purposes when a business is acquired. This allocation is required under ASC 805 (formerly SFAS 141), “Business Combinations.” In addition to real estate and machinery/equipment valuations, Appraisal Economics has extensive experience in intangible asset valuation, and establishing the useful lives of such assets.
Among the various types of intellectual property and intangible assets to which Appraisal Economics has assigned value are:
- Trademarks and trade names
- Patents and licenses
- Unpatented proprietary technology
- Customer lists and relationships
- Non-compete agreements
- In-process R&D
- Trained and assembled workforces
- Favorable financing
- Leasehold interests
Intangible assets such as brands, intellectual property and licenses now comprise a greater percentage of the economic value of successful businesses than ever before. Some economists argue that intangibles represent the main performance drivers in the current transition from a traditional financial economic structure to a new knowledge-based economy.
The value of identifiable intangible assets is important to:
- Shareholders and their advisors, for use in assessing the true worth of their companies
- Management, as a useful tool for measuring performance, for taxation purposes and in the event of an acquisition or disposal under ASC 805 (formerly SFAS 141)
- Financiers, for use in assessing the borrowing capacity of a company when arranging funding facilities. Sophisticated lending institutions now recognize the value of certain intangible assets as security for loans.
Determining the true value of a company requires an accurate, defensible assessment of both types of assets –tangible and intangible property. At Appraisal Economics, we have the skill, expertise, experience and resources to provide meaningful IP valuations. As importantly, we stay current with all emerging trends in this rapidly changing area and adapt our own processes to reflect the current state of the art and provide our clients with the best IP valuation and intangible asset valuation services available anywhere. Appraisal Economics also offers IP Advisory Services for clients looking to enhance their IP portfolios
Please take a moment to browse our site for a more comprehensive look at all of our valuation services from goodwill impairment analysis to solar power valuation and more. Contact us for more information on IP valuation.