Intellectual Property Valuation: Benefits and Methods

Intellectual Property Valuation: Benefits and Methods.What is IPR Valuation?

Intellectual property rights valuation or IPR Valuation is one of the most critical areas of finance that comes into play during the sale and purchase of companies and during solvency, merger, and acquisition transactions. Intellectual property is intangible assets that are either already patented or a patentable product, process, or service, or a trademark, copyright, or brand.

Why do you need an IPR valuation firm?

Establishing the worth of IP is critical for determining sales, licensing, or transfer pricing for IP assets, and merger and acquisition (M&A) transactions. However, IP valuation is a highly complicated process. The problem of how to quote the true value to something that does not have any physical presence always prevails and also the ever-changing regulations governing IP valuation, which vary from one jurisdiction to the other, is also a massive influencing factor. IPR valuation is a specialized area and an expert or a valuation firm can only help in working out the true value of a business and capitalize on assets that one may not have been aware of possessing. Firms often invest heavily in the creation of Intellectual Property, and there's a major risk of wasted investment. This risk can be counterbalanced by high potential IP assets if they are commercialized. And thus IPR valuation firms play a crucial role here. An experienced IPR valuation firm such as Resurgent India does not only understand these changing factors but also closely studies the worth of Intellectual Properties of competitors and also keeps a track of the demand and growing popularity of the IP components.

Methods of IPR Valuation

• Income Method: This is the most common technique used in Intellectual Property valuation. In this process, the assessment is made based on the economic income expected to generate from it against the present-day value. This method is popular in scenarios where IP assets have promising cash flows and future estimation can be made based upon the cash flow generated in the past.
• Market Method: This method uses the market behaviour as a base to quote a value to the IP of a company. The price paid for the transfer of similar rights in another comparable transaction is used to influence the IP valuation of another transaction.
• Cost method: In this valuation technique, the valuation of an IP is conducted by enumerating the cost of a similar IP asset. This method comes in handy when the IP asset in question can be easily reproduced and its economic benefits cannot be easily quantified.

Original source of this blog : https://www.resurgentindia.com/intellectual-property-valuation-benefits-and-methods

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Website:- https://www.resurgentindia.com/

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Name :- Resurgent India Seo Website :- https://www.resurgentindia.com/ Contact Us :– E-mail :- Corporate: corporate@resurgentindia.com