How is a valuation of intangible assets performed?

Sep 9, 2022 | Intangible assets | 0 comments

Knowledge of intangibles is important for a correct valuation. You would be surprised how many companies have more than half of their value in intangible assets and are not taking advantage of it. If you still do not know what intangible assets are or you are not aware of the subject, you can visit What is the Valuation of intangible assets? for more information. For this reason, we have decided to talk a little about the models that allow the valuation of intangible assets.


Intangible asset valuation models

A fundamental limitation for this type of model is the availability of information, since there are constantly no benchmarks that can contribute to this valuation process. To better understand this procedure, we could ask ourselves the following question: what benefits do I receive from an intangible asset? This type of model could well be applied to the case of the valuation of creator’s rights royalties. One of the most relevant resources once it is desired to examine the effect of a brand is clearly the definition of the contributions it makes to trade, therefore, it is a complex task, since it is not clear how the flows attributable to this intangible should be divided. In the valuation process of a brand, the destination of the valuation is paramount, since for the owners its cost will surely be higher than for the participants or future shareholders. Another key process for a company strongly related to its trademark is that they know how to register their how to register with IMPI for all kinds of formalities and legalities. Understanding this process is essential to quantify how a brand cooperates with commerce and thus correctly allocate its cost.


The methodology consists of 3 stages:

First stage

The value of the company is calculated and the composition of the brands in each one is studied. The rate will be used for the estimation exercise involving the identification of the value of the company, which consists of estimating future cash flows, under certain behaviors.


Second stage

It is based on detecting the cost of the brand through a customer measurement exercise, a market analysis, etc. Here we identified the contribution of the brand, which means quantifying the cost of the brand in the minds of customers.


Third stage

It links the two previous stages, to finally quantify the value of the brand, a dollar measure that, according to the data in the tables, can exceed domestic production in many countries. However, the valuation of intangible assets may seem simple, but it requires certain information and time to create a more accurate calculation, therefore, it is important to consult professionals with experience in the subject. ALCON is an accounting firm that has the professionals that will help your company in the valuation of your company’s intangible assets. Our professionals at ALCON can help you! With their great experience they will advise you on the subject of VAT refunds.Contact Us! Via WhatsApp or by e-mail. Follow us on our Facebook e Instagram


Submit a Comment

Your email address will not be published. Required fields are marked *