Intangible assets are increasingly being recognized as some of the most valuable assets of business enterprises. Accordingly, the need for valuations of intangible assets and intellectual property has increased in recent years. Common valuation purposes include the following:
Transaction pricing and structuring
Intercompany transfer pricing
Establishing royalty rates for licenses
Financing securitization/collateralization
Tax planning and compliance
Bankruptcy and reorganization analyses
Litigation support and dispute resolution
Management information and planning
Fresh start accounting
The appraisal process for valuing intangible assets follows the same systematic approach undertaken in equity valuations. However, the methods used to value intangible assets may differ substantially from those used in equity valuations. Valuing intellectual property and other intangible assets requires an understanding of the various methodologies which are appropriate given both the asset being valued and purpose of the valuation.
