INTELLECTUAL PROPERTY VALUATION METHODOLOGIES

IP Valuation Methodologies

IP Valuation requires an additional analytical component compared to business valuation.  IP valuation requires understanding of the valuation context (Tax, Transaction, Litigation, etc.) and analysis of the business and industry. In IP valuation, the specific asset to be valued needs further research and analysis, and those benefits specific to the subject assets need to be apportioned or analyzed separately from the profits achieved by the entire business. Nevium’s experience and ability to apply innovative analytical solutions to complex problems enables our team to accurately identify and apportion the economic benefits and value derived from patents, trademarks, copyrights, brands, trade secrets and other intangible assets.

IP Valuation at Nevium

Our process combines a thorough understanding of valuation methods and techniques with well-researched facts and analysis to address the science of the valuation. In addition, our understanding of the unique characteristics of each type of intangible asset and the unique ways in which these assets yield economic and financial benefits enables us to excel in the art of communicating and explaining the complexities of IP analysis in a way that benefits everyone who encounters our valuation reports.

IP Valuation Methodologies Derive from the Three Foundational Approaches

Cost Approach: Quantification of the time, effort and investment to replicate, replace or repair. IP valuation methodologies include: replacement cost, cost to create, cost to repair, corrective advertising and more.

Income Approach: Quantification of the present value of future economic benefits received from ownership of an asset / business. IP valuation methodologies include: discounted cash flows (DCF), relief from royalty (RfR), and typically involve an apportionment of past or future profits specific to the subject intellectual property.

Market Approach: Quantification based on observed transactions involving comparable or similar asset. IP valuation methodologies include: comparable transactions, guideline companies, and comparable licensing transactions.

Getting an IP Valuation opinion typically starts with a complimentary call to see if Nevium can help. Our guide to gathering the information typically required to start an IP valuation can be downloaded here.  

Why IP Valuation?  

IP can be valued for many different purposes and contexts. Nevium has provided IP valuations used by estate and tax advisors, for transfer pricing strategies and tax disputes, in litigation, for transaction due diligence and to provide strategic insight for business managers, investors and executives.