The term “Intangible Assets” includes a wide variety of assets such as patents and intellectual property, brand names, non-compete agreements, workforce in place, licenses, contracts with customers, or any other identifiable asset that is not physical in nature. Although these assets cannot be seen or touched, they can have significant value to their owner. For example, a strong brand name confers value in the form of higher prices, customer loyalty, and market acceptance, as compared to no-name products that may be otherwise similar or even superior.
In our valuation work, intangible assets are most often of special interest when a business is sold. Intangible asset value is the price paid for the business above the value of the tangible assets. For accounting and tax purposes, the total intangible asset value must be allocated between specific intangible assets, with any unallocated amount being classified as goodwill. Each category of intangible asset, including goodwill, may need to be reexamined annually to test for impairment, to ensure that an entity’s assets are not carried on the books at more than their recoverable amount.
Although there are at least 30 categories, the most common categories of intangible assets we see are:
- Workforce in place
- Patents and intellectual property
- Non-compete agreements
- Software, websites, and databases
- Lease agreements
- Brand names, trademarks, and trade names
- Each of these has its own valuation methodology, which can sometimes be complex.
BEAR has the necessary expertise and experience to value your intangible assets correctly.
BEAR, founded in 1986, is a business valuation firm working through a nationwide network of valuation experts, CPAs, business brokers, and consultants. Among our staff we have the major valuation credentials, including ASA, CPA/ABV, CVA, CFA, and MVS.