INTELLECTUAL PROPERTY VALUATION
Intellectual Propetty Valuation is a crucial aspect of business today. Almost every business utilises or creates intellectual property in its everyday endeavours. In this highly competitive world it is essential for a business to identify and protect its IP through Intellectual Property Valuation, so as to take full advantage and turn intangible assets into exclusive property rights. Once an IP audit has been conducted it is essential to protect the company's interest in these assets. There are several areas of protection available. These are:
Patent
Trade Mark
Copyright
Design
Valuing the commercial potential of Intellectual Property assets requires both an understanding of the scope of the IP and the business sector in which the assets could be exploited. The primary reason for Intellectual Property Valuations is to maximise its value and therefore the value of the owner organisation through optimum management decisions.
The Australian Accounting standards Boards standard AASB 138 deals with the specific aspects for intangible assets. To meet the definition of an intangible asset, an asset must be identifiable to distinguish it from goodwill. To be identifiable the asset must be separable or arise from contractual or other legal rights. Separable means that the asset is capable of being separated from the organisation and is able to be sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, asset or liability.
WHAT IS YOUR IP WORTH ?
The value of intellectual property (IP) is often not adequately appreciated and its potential for providing opportunities for future profit is widely underestimated by SMEs. However, when IP is legally protected and there is demand for the IP-protected products and/or services in the marketplace, IP can become a valuable business asset. •IP may generate an income for your SME through the licensing, sale, or commercialization of the IP-protected products or services that may significantly improve an enterprises market share or raise its profit margins.IP rights can enhance the value or worth of your SME in the eyes of investors and financing institutions. In the event of a sale, merger or acquisition, IP assets may significantly raise the value of your enterprise, and at times may be the primary or only true assets of value.
Our approach to Intellectual Property valuation is straightforward. We strive to comprehensively understand your assets and specific situation before beginning our analysis. Once we have a thorough understanding of these important factors, we carefully conduct our research and analysis so that it captures all relevant inputs and considers all possible aspects necessary to provide you with accurate, useful and complete information.
We understand that IP is unique. Therefore, a "one-size-fits-all" approach is unable to provide you with the precision you need. We believe in providing professional, competent and thorough analysis that is specific to the client's needs on each Intellectual Property valuation project.
Intangible Asset valuation in general, and Intellectual Property valuation, are specialised processes derived from financial and economic valuation concepts. To determine the value of a specific instance of Intellectual Property (such as a trademark, patent or copyright), we rigorously apply appropriate methodologies in accordance with recognized Intellectual Property valuation principles.
Valuations are necessary in many contexts. These may include investment analysis, capital budgeting, merger and acquisition transactions, financial reporting and taxable events, as well as bankruptcy and litigation proceedings. Our analysis provides the necessary support for the strategic decision-making processes utilised by investors, management and counsel during these important events.
When valuing I.P. usually the income approach is utilised which takes into account the economic benefits of the asset (technology) , and the future revenue stream it provides , discounted into the present by the use of Net Present Value (NPV) or Discounted Cash Flow (DCF).