How much is your business worth? Your accountant may calculate the value of your tangible assets, but what about your business intangible assets? Your “good will” and Intellectual Property rights often exceed, by several multiples, the value of your tangible assets.
IP Valuation is a process and a set of procedures used to estimate the economic value of a business. IP Valuation is used by financial market participants to determine the price they are willing to pay or receive to perfect a sale of a business. In addition to estimating the selling price of a business, the same IP Valuation tools are often used to resolve disputes where Intellectual Property assets are involved. For example, IP Valuation is used in estate and gift taxation, divorce litigation, allocate business purchase price among business assets, establish a formula for estimating the value of partners' ownership interest for buy-sell agreements, and many other business and legal purposes.
Three different approaches are commonly used in IP Valuation: the income approach, the asset-based approach, and the market approach. Within each of these approaches, there are various techniques for determining the value of a business using the definition of value appropriate for the appraisal assignment.
Generally, the income IP Valuation approach determines the value by calculating the net present value of the benefit stream generated by the business (discounted cash flow); the asset-based IP Valuation approach determines the value by adding the sum of the parts of the business (net asset value); and the market IP Valuation approach determines the value by comparing the subject company to other companies in the same industry, of the same size, and/or within the same region. A number of business IP Valuation models can be constructed that utilize various methods under the three business IP Valuation approaches.
In determining which of IP Valuation approaches to use, a GOLAB IP Valuation professional must exercise discretion based on substantial legal and financial knowledge and experience.
CONTACT GOLAB IP WE CAN HELP
|
