IP derives it’s value from a range of variables, including legal protection, industrial impacts, market share, age and history, barriers to entry, profitability of the asset within an organization, market impact, projected lifetime, industrial and economic factors and technological innovation.
The appraisal process is a matter of gathering information about the asset, the market and the use within the enterprise, in addition to understanding the economic environment, industry and specific issues that impact the implementation of the asset.
We can appraise Intellectual Property in compliance with USPAP (the Uniform Standards of Professional Appraisals Practice) and generally accepted accounting principles. We use a cost approach (historical cost, replacement cost and replication cost). This analysis is compared to a market approach, which is based on the economic principle of competition and market share of competing assets.
We then look at the income potential of an IP asset,estimating the useful lifespan of contributions to product or service lines of the company as well as competitors or potential partners.
Finally, we look at the current value of shares of intellectual property in an IP Share Market.