Understand Intangible Valuation
Intangible valuation refers to the process of determining the value of non-physical assets such as patents, trademarks, copyrights, and goodwill that can significantly impact a company's financial performance. To perform this valuation, an in-depth analysis of the company's operations and industry is necessary, taking into account factors such as legal protection, market demand, and future revenue potential. Intangible valuation is often required for mergers and acquisitions, financial reporting, and tax purposes. Accurately valuing intangible assets provides businesses with valuable insights into their worth, enabling them to make informed decisions and optimize asset use for increased profitability.
MMA's Intangible Valuation services offer clients a specialized approach to identifying and quantifying the value of intangible assets. Our team of experts has extensive experience in valuing a wide range of intangibles, including intellectual property, brands, customer relationships, and more.
Methods to do intangible wevaluation
There are several specific methods used to do intangible valuation. Here are some commonly used methods:
The income method calculates the present value of the future cash flows expected to be generated by the intangible asset. This method is often used for trademarks, patents, and copyrights.
The market method compares the value of the intangible asset to similar assets that have been sold in the market. This method is often used for trademarks and brand names.
The cost method calculates the value of the intangible asset by determining the cost of creating or reproducing the asset. This method is often used for patents and copyrights.
Relief from Royalty Method
The relief from royalty method calculates the value of the intangible asset by estimating the royalties that would be paid if the asset was licensed to a third party. This method is often used for trademarks and patents.
Multi-Period Excess Earnings Method
The multi-period excess earnings method calculates the value of the intangible asset by estimating the future cash flows that are expected to be generated by the asset and then deducting the expected return on other tangible assets.
Real Options Method
The real options method calculates the value of the intangible asset by considering the flexibility that the asset provides in terms of future investment opportunities. This method is often used for patents and technology-related assets.
Each of these methods has its own strengths and weaknesses and may be more appropriate for different types of intangible assets. Our skilled valuator will consider multiple methods and determine the most appropriate approach based on the specific circumstances of the valuation.
Years of Experience
- MMA provides customized intangibl valuation services to clients.
- The analysis and methodology used are tailored to meet each client's unique needs and goals.
- MMA has industry-leading expertise and insights in equity valuation.
- The goal is to provide comprehensive and reliable valuations to clients.
Experienced Valuation Team:
- MMA's team is composed of seasoned professionals.
- Team members have years of experience in valuation, finance, and accounting.
- Advanced degrees and credentials such as FCA, Reg. Valuer (SFA), and MBFCC are held by team members.
- The team's expertise and experience enable them to provide high-quality, accurate, and reliable valuations.
- MMA's team has in-depth knowledge of multiple industries and sectors.
- This knowledge enables the team to provide specific insights and analysis for each client's business.
- The team stays current with the latest market trends and changes in valuation methodologies.
- The goal is to provide clients with the most accurate and comprehensive valuations possible.
Independence and Objectivity:
- MMA maintains strict independence and objectivity during the valuation process.
- The team is free from any conflicts of interest.
- Valuations are based on reliable data and objective analysis.
- Clients can trust the accuracy and integrity of the valuations provided by MMA.
- MMA is dedicated to providing exceptional customer service.
- Ongoing support and guidance are provided throughout the valuation engagement.
- Client questions and concerns are addressed promptly and professionally.
- The goal is to ensure that clients are fully satisfied with the valuation process and outcome.
Choosing MMA for intangible valuation services ensures that you receive an accurate and comprehensive assessment of your intangible assets, giving you the insights you need to make informed business decisions.
Kpis To Measure The Service Quality
- Actual vs. budget costs.
- Budget needed for completion vs. budget remaining
- Lead time and Cycle time.
- Team Velocity
- Deployment frequency
- Time spent vs. time planned (for iteracions or implementation of partic features)
- Time spent by a customer's employees fulfiling a vendor's requests
- Time of delays with requirements elicitation sessions on the customer’s side
- Overall customer satisfaction score
- The team's proactivity (problem-solving Skills, ability to give advice)
- The team's reliability (fulfilment of promises)
- The team's responsiveness (including availability)
The Benefits of Investing in Intangible Assets
Intangible assets, such as patents, trademarks, and customer relationships, can be valuable investments for businesses. However, like any investment, there are so many benefits to consider.
Intangible assets can provide a competitive advantage by differentiating a business from its competitors. For example, a strong brand or reputation can attract customers and increase sales
Intangible assets can generate revenue through licensing agreements, royalties, and other forms of monetization. For example, a patent can generate revenue by licensing the technology to other companies
Intangible assets can provide long-term value by generating revenue over an extended period. Unlike tangible assets, which can depreciate over time, intangible assets can maintain or increase in value.
Intellectual Property Protection:
Intangible assets can be protected through intellectual property laws, providing legal recourse against infringement or theft. Also can be leveraged as collateral for loans providing additional benefits to businesses.
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MMA Intangible Valuation Service - Q&A
What is the process for an intangible asset valuation?
The process for an intangible asset valuation typically involves collecting data on the asset, analyzing the market and industry, determining the appropriate valuation method, and applying the selected method to calculate the asset's value. The valuation report will outline the assumptions made, the analysis performed, and the final value of the intangible asset.
Who performs intangible asset valuations?
Intangible asset valuations are typically performed by valuation professionals who have expertise in the specific industry and type of intangible asset being valued. MMA has a team of experienced valuation professionals who specialize in various industries and have the necessary knowledge and skills to perform intangible asset valuations.
How long does an intangible asset valuation take?
The time required for an intangible asset valuation depends on the complexity of the asset and the scope of the engagement. A simple valuation may take a few weeks, while a more complex valuation may take several months.
How much does an intangible asset valuation cost?
The cost of an intangible asset valuation depends on the complexity of the engagement, the scope of work, and the amount of time required. MMA provides transparent pricing for its valuation services, and the cost will be discussed upfront with the client before the engagement begins.
How is the value of intangible assets useful to my business?
The value of intangible assets is useful to businesses for various reasons, such as mergers and acquisitions, financial reporting, taxation, litigation support, and strategic planning. It helps companies to make informed business decisions based on the value of their intangible assets and their impact on the overall value of the company.
Can intangible asset valuations be challenged by tax authorities?
Yes, intangible asset valuations can be challenged by tax authorities if they disagree with the valuation method or assumptions made by the valuation professional. However, if the valuation is based on sound methods and supported by appropriate evidence, it is more likely to withstand a challenge.
What happens if my company is involved in a legal dispute over intangible assets?
If your company is involved in a legal dispute over intangible assets, an intangible asset valuation can be used as evidence to support your case. The valuation professional can testify as an expert witness and provide an objective and defensible valuation of the intangible assets in question.
Can intangible asset valuations be updated over time?
Yes, intangible asset valuations should be updated over time to reflect changes in the market, industry, and specific asset being valued. This is especially important if the asset is being used for financial reporting or taxation purposes.