Valuation & Litigation Advisory Blog

This month's issue of Valuation & Litigation Advisory Insights includes the following articles:

• Intangible Assets – If I cannot See Them, What Are They?
• What is the value of intellectual property
• The perfect exit strategy: Don’t leave it to chance

Intangible Assets – If I Cannot See Them, What Are They?

“All arguments concerning existence are founded on the relation of cause and effect.” - David Hume

In the quote above, David Hume, a famous philosopher, says that the basis of existence is founded in cause and effect.  Cause and effect is simple to picture for tangible objects – if I cause my finger to type a letter on the keyboard, that letter shows up on my computer screen.  It becomes a little more difficult to picture cause and effect with intangible things – if I greet a stranger on the sidewalk as I walk past them, did that greeting have a positive or negative effect on them?

Similar to the example above, it is often much more difficult to determine the value of intangible assets in the acquisition of a company compared to determining the value of the company’s tangible assets.  Intangible assets are just that – non-tangible, non-physical.  This can make identifying and valuing such assets a difficult task, although it must be done to comply with Generally Accepted Accounting Principles related to business combinations and purchase accounting.

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What is the value of intellectual property

A valuator’s conclusions depend on many factors, but these are particularly complex for intellectual property (IP) valuations. This article explains that the valuator must know what type of interest is being valued, and whether it’s being valued on a stand-alone basis or as part of an aggregation of assets. An IP asset’s value is also heavily influenced by its remaining useful life.

The perfect exit strategy: Don’t leave it to chance

At some point in time, every business owner will retire and either sell his or her ownership interest or leave the company to others. The key to a seamless transfer is to identify an exit strategy that addresses the needs of not only the departing owner, but also the company in question. This article describes the ins and outs of creating an effective exit strategy, and looks at the various legal options available, depending on the owner’s goal for the business.

Prior issues are available in the E-Newsletter Archive of our Valuation & Litigation Advisory Services Resource Center. If you would like to subscribe to this free, monthly, business valuation and litigation support e-newsletter, send an email to info@skodaminotti.com.

If you have any questions about any of these articles, post a comment below or please contact our Valuation & Litigation Advisory Services Group at 440-449-6800.