Intangible Asset Appraisal

Trademark or brand means symbols, logos that are used for referring to the products or representing them. It can be called in various terms such as trademark, brand, etc. Brands are more meaningful than being just a logo or trademark that differentiates products and indicates ownership in terms of business. In fact, brands have monetary values that can be appraised, studied, and researched on world-famous brand values. For example, the Interbrand group has revealed the 2018 brand data and information for education. The four most valuable brands are Apple, Google, Amazon, and Microsoft. Therefore, the brand is considered a unique type of property and has a massive influence in business, intellectual property rights, legal rights; continuously developed and is also one of the tools and strategies to compete and differentiate yourself from the market. In this case, the business organization must have strong brand management in order to be accepted by consumers resulting in the concept of brand and trademark valuation. According to the consumer’s perspective, brands are measured from awareness, attitude, attachment, and loyalty. On the other hand, the value of brands in terms of products is measured from market share, revenue, etc. Therefore, adding value to the brand is basically increasing the business’s intangible assets and benefits when launching new products, blocking competition, especially for those entering the market. Stronger brand values tend to receive more recognition by traders, distribution channels, and wide distribution of products. Those highly well-known brands tend to have more negotiating or bargaining power, resulting in a lower amount for placing the products and receiving a better allocation of space in the store, market, etc. That is why brands are significant and valuable to the products. Therefore, brand valuation is another way to measure the strength of each brand, level of business which includes communication to consumers and society to be recognized in today’s market. There are plenty of valuation methods to use in brand and trademark valuation, which depend on types of products, sufficiency, and reliability of the information. In addition, brand status on the appraisal date also has an influence on selecting the valuation method. However, more than one valuation method should be used in this appraisal to compare and review the appraised value. All the valuation methods that can be used for brand and trademark valuation are Cost Approach, Market Approach, and Income Approach by calculating the difference in selling price (Price Premium), the right rental fee (franchise method). This is considered a very high acceptance method for this type of property valuation.

The idea of ​​developing and improving new work systems for new generations are commonly involve with technology as a component under the knowledge base as well as existing experience in creating technological innovations in the form of digital at the level of modern applications or  platforms in order to create a new service, a new product, new work process and prepare to launch for business in the future which is related to intellectual property or IP valuation. In this case, the property valuation in the conceptual process layer which is in the process of being invented and developed is required to conduct a comparative study between the current market and changes in market status in terms of innovation utilization in business. The important variables are target customers, market competitors, market shares etc. The question of how many advantages will there be for each factor? Mostly, the new inventions and innovations are more likely to have advantages than the original basic ones which when completed, may be in the form of a tangible or intangible asset. For your information, these factors can be appraised using the ‘Income Method’ by projecting the discounted cash flow to be further and you will be able to find the value of the following technological innovation which will be very useful for those who needs funds to develop technological innovations into their business in which those who are interested will have the references from the licensed valuers with the reliable professional standards. In the end, the valuation using the income approach from the idea of the innovation’s owner by projecting Discounted Cash Flow, it will be possible to find the value in such innovative technology with more effectiveness. This will be beneficial for start up firms who need funding to develop innovations for businesses through preparation of business plan in order to attract interested investment parties. Software Valuation Why the need to appraise software program value? Accounting reasons – When an organization invests into the research & development purpose for a certain program with a large amount of money. This investment is recorded as the company’s expenses. However, after an independent valuer appraises the value, it can be registered as an asset, which is more useful and effective in terms of the company’s overall performance. Company’s asset: Represents the status of the enterprise for use in trading or negotiation in mergers and acquisitions, especially start-up businesses. The software license program in a business organization can be defined by 2 business user groups. First is the ‘End User’ who utilized the program and second is the business groups who develop the program. These are the factors that should be considered: The license of the program that has been bought as the company’s ownership. A license price must exist in the market so that it can be used for comparison. The factors to be taken into consideration are the remaining time of utilization as well as the opportunity that the version will be upgraded for determining the utilization lifetime. The self-developed program contains a development history from the start until the present is considered from the costs of program development in the past compared to the one in the present. However, there are many types of applications that have emerged in these modern days that are replaceable. Therefore, the ‘Market Approach’ as the valuation method is important to be considered. For those organizations that develop the program, release, or service as a platform. For this case, the software valuation will consider: First, program development costs, history since the start until the present, see the program components as modules in which the cost of program development can be calculated as ‘Man-day’. Next, the program’s potential to generate income is divided into two main groups: selling rights consist of implementation fee, modification fee, and annual maintenance fee. On the other hand, those programs that are platforms for rent will have to pay attention to the number of users on that platform and the membership fee compared to market competitors. The other incomes can be advertising expenses etc.  As for the platforms under development or a conceptual model that has not been released yet can also be released. However, kindly note that it will be a technology valuation or innovation under the assumption.

Intellectual property or IP Valuation is a legal right that grants the owner of the rights or ‘right holder’. They are some things that are above human intellectual creativity, which can be divided into two kinds. First, industrial property, and second, copyright that can be split into another eight types as shown below: Patent Petty patent Trademark or Brand name Trade secret Geographical Indications Plan of integrated circuit Plant variety protection Local wisdom These are considered intangible assets owned by individuals and business juristic. Usually, copyright valuation will be compared to other properties under ‘Brand’ in order to see the potential in terms of generating income of the existing right. The comparison criteria are the rights in the market that can be offered for rent for a similar product or service.

What is the right of claim? The claims shown in the contract can be valued as rights that should be granted or the right to be responsible for paying. Therefore, the right of claim valuation is required whenever a business is transferring hands to be used as a reference, such as business transfer which contains various claims that must be gathered into the new business of the buyer, estimation of the monetary amount that should be received or paid for example leasehold rights, land utilization right, etc.