What is Intellectual Property Valuation?

Intellectual-property-valuationIntellectual property valuation is the process of determining the fair value of an individual’s or company’s intellectual property asset(s). Intellect property is an intangible asset that can be sold or bought just like any property. Hence, its valuation is important in determining its market price. Intellectual property valuation is required during merger or joint ventures, litigation, divorce cases and in estate planning. Some of the institutions that require valuations of intellectual property include banks and investment bankers. Banks require these valuations to determine the suitability of collateral. Merger financiers require intellectual property valuation for the same reason.                                                                                                             SEO Expert London

The government requires accurate valuations of intellectual properties when determining the taxable amount of their transfers. The tax revenue from transfer of intellectual property assets depends on their valuation. Other parties that require intellectual property valuations to make an accurate judgment are courts and auditors.

The most common methods of valuing intellectual property include:

  • The cost method: The method determines the value of an intellectual property asset by considering the cost of reproducing it in the future. The method considers the price or cost of its equal substitute as well.
  • The market method: In this method, the actual sales of similar assets in the past are compared and used to determine the value of an intellectual property asset. The method is inapplicable to assets that have no past transactions.
  • The income method: This method considers the income that an asset could generate. The current and projected earnings are useful in this valuation method.

The accuracy of intellectual property valuation depends on the competence of the property valuer. You must seek valuation services from credible institutions if you want accurate valuation reports. The value given could lead to losses if the property valuer is biased or inaccurate. Perth property valuers provide reliable realestate valuation services including intellectual property valuations. See more details at www.valuationswa.com.au