What are intangibles?
Intangible assets (assets without physical substance and that allow future economic benefits to be generated) have a high degree of importance when carrying out the valuation of a company or an economic model, and within this type of assets are patents, these types of assets play an important role within the economy of any company, because they influence the marketing and reproduction of its products and/or services, and therefore, in your financial well-being.
ANEPSA has trained personnel to carry out appraisals of brands and other types of intellectual property intangibles, based on the IFRS and the National Financial Reporting Standards. Categories of intangible assets can be divide into 4: Market Assets, Intellectual Property Assets, Human Assets, Infrastructure Assets, these are generally found in:
- Industrial Secrets
- Other Intangibles
What is a patent?
According to WIPO, A patent is an exclusive right that is granted over an invention. In general terms, a patent entitles its owner to decide whether the invention can be used by third parties and, if so, in what way, in return for that right, in In the published patent document, the patent holder makes the technical information related to the invention available to the public.
Once the company decides to buy a patent, it should ask itself if it has an important significance for someone to decide to pay to use it. If the answer is affirmative, then what follows is to ask how much they would be willing to pay for. that person or company for using the product or service that was patented; This is when the valuation of patents becomes an indispensable part of a company.
How is the value of a patent composed?
The value of the patent lies, essentially, in whether it meets the needs and requirements of the public to which it is directed, as well as meeting their expectations. The composition of the value of a patent must consider the following points:
What characteristics does the Patent Valuation have?
Currently the intangible assets (where we find patents and utility models) have acquired great importance, Well, its valuation has become one of the most interesting fields for appraisers, since in patents the consumer is the one who largely determines their greater or lesser value.
So it can be said that the patent appraisal will reflect how much the intangible asset is worth, according to the improvement of production processes that it generates or the degree of commercialization that is achieved.
How is its value calculated?
It is important to precisely identify which valuation techniques or methods are most appropriate to the circumstances, for which there is sufficient information and data to measure the fair market value of the patent. As appraisers, we must maximize the use of more input data. observable and relevant.
The objective of using a valuation method is to estimate the fair market value at which an orderly transaction of sale of the asset between market participants would take place on the measurement date under present market conditions.Likewise, for any other purpose, the appraiser will identify the most appropriate method.
The IFRS identifies three widely used valuation methods: Market approach, the cost approach and the income approach also state that an entity will use valuation methods consistent with one or more of those approaches to measure fair value.
Judgment must be used to establish whether the fair value of the patent can be determined with sufficient reliability with each of the methods mentioned.
For example, when there is an observable market of purchase and sale transactions of comparable brands, we can use the market approach; however, when this data set is poorly observable and there is not enough comparable data within the market, it will be necessary to consider the other two approaches, the same will happen for the income and cost approach, for the income approach, it will be very important to count the financial statements of the business, and apply the most assertive valuation methods.
In this way, as a valuation unit, the most appropriate valuation criteria and methods will be applied for the circumstances in which said brand or intellectual property is found.
What methods are used in the valuation of brands?
This method assumes that the value of the patent is equal to the research and development costs that were used to create the patent; however, this approach is not convenient if the valuation is carried out in order to carry out a financial transaction.
In this method, the competition that exists within the patent market must be analyzed, which can become somewhat complex, since patents similar to the objective patent of the valuation must be considered, and their degree of innovation compared.
Under this approach, the value of the patent is directly proportional to the revenue stream that the patent holder intends to earn during the patent protection period. This is a method that is generally used when the patent valuation is intended to attract new investors and thus be able to let them know how much profit they can earn with the patent or with products derived from it.
Why is it necessary to carry out a Patent Valuation?
The holder may have several reasons for being interested in carrying out a patent valuation, among them it may be that he is interested in selling it or in obtaining royalties for its use and reproduction, or he just wants to know its value, he may also be interested in your patent has a greater penetration in the market.
Some important reasons why a patent valuation is necessary are:
- It is the basis of a buying or selling process.
- Better positioning within the sector.
- Improves negotiation with financial institutions.
- It can serve as collateral for loans.
- Recognition in financial statements increasing the capital of the company.
- Tax Deduction Benefit
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