The future income method
How can we make the most of intellectual property protection?

This valuation is based on an estimate of operating income rather than gross margin, and does not take into account all the administrative, marketing, sales and R&D costs required to bring the product to market, which would lead to an overestimation of the value of the intangible asset concerned.

A valuation based on pre-tax income, which includes financial and exceptional income/losses, would also be inappropriate, as these parameters are not directly linked to the intangible asset and could lead to it being undervalued, if, for example, the company has a very high level of debt.