Uncovering Your Hidden Value

Posted on 01 Nov, 2021
By IPOS International

Have you ever wondered what your intellectual property (IP) is worth? Or wished that you could express the value that is ‘hidden away’ in your intangible assets, which isn’t reflected on your balance sheet but represents a vital investment for the future? If so, this guide is for you.

The main purpose of this guide is to help you determine whether, and when, conducting an IP valuation might be commercially beneficial for your business. It’s divided into five main chapters (plus some worked examples and further references) that are intended to address the most important questions you may have about the process and the advantages. You don’t need to be an accountant or lawyer to use it.

Chapter 1 addresses the question: if IP is so important, why isn’t its value obvious from my company’s accounts? The guide takes you through a few accounting basics to explain when IP and intangibles feature, and when they do not. It then explains why this position might be disadvantaging your business, and how an IP valuation report may help.

Chapter 2 introduces you to the main principles that guide the IP valuation process and provides an overview of the regulations and standards that govern it.

Chapter 3 then goes into more detail about the contexts in which having an IP valuation could be most useful. It starts by setting out cases where getting a valuation prepared is more or less mandatory and then moves onto several other business purposes that can be facilitated by a suitable report.

Chapter 4 then runs through each of the three main methods that are employed, summarising the advantages and disadvantages of each one, and how the appropriate method is selected.

Finally, Chapter 5 discusses the factors that are most likely to influence an IP valuation calculation and tells you what you will need to provide to get a report produced.