1. What intangible assets can be valued?
A pragmatic approach is to identify all rights and all knowledge or information for which a third party is willing to pay a certain price, either to gain access to it or to exploit it, i.e. which have a commercial value. These include :
patents for inventions (including plant breeders' rights), or patentable inventions kept secret ;
software, databases ;
ornamental creations protected by design or copyright;
trade secrets, know-how (industrial or commercial) which must be secret (i.e. not easily accessible), substantial (i.e. providing a competitive advantage such as reducing manufacturing costs), identified (e.g. test reports, plans, models, prototypes, training manuals, procedures, specifications, clinical trials, biological materials,...
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What intangible assets can be valued?
Valuation principles
Bibliography
R. Goldscheider, J. Jarosz and C. Mulhern, Use Of The 25 Per Cent Rule In Valuing IP , LES News, December 2002
Websites
http://www.ipresearch.com/index.htm Intellectual Property Research Associates website, offering information on licensing rates by industry sector.
www.lesi.org Licensing Executives Society website
Acronyms and abbreviations
CAPM: Capital Asset Pricing Model
WACC: Weighted Average Cost of Capital
DCF: Discounted Cash Flow
EBITDA: Earnings Before Interest Taxes and Amortization
ENPV: Expected Net Present Value
ISO: International Organization...
Vocabulary
Due diligence: financial audit
Cash flow: surplus of financial flows generated by the operation of intangible assets.
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