The International Valuation Standards Council (IVSC) has issued two exposure drafts on the valuation of intangible assets:  

1. Revised Guidance Note no 4 Valuation of Intangible Assets identifies and defines the principal approaches and methods used in intangible asset valuation, with the objective of reducing the diversity of terminology and making valuation reports more comprehensible to users worldwide. 
2. The new Guidance Note no. 16 Valuation of Intangible Assets for IFRS Reporting Purposes draws the attention of valuers and those commissioning valuations for use in financial statements, to the principal accounting requirements of the International Financial Reporting Standards (IFRS) under which the valuations are prepared and provides guidance on the appropriate valuation response. 

The drafts are a major revision of the IVSC’s earlier guidance, which dates to the late 1990s. The introduction of International Financial Reporting Standard (IFRS) 3 on Business Combinations in 2004 led to an increased demand for intangible asset valuation. In 2007, the IVSC issued a Discussion Paper Determination of Fair Value of Intangible Assets for IFRS Reporting Purposes, which attracted worldwide comment and interest and led to the development of the two exposure drafts.

The International Valuation Standards Board, the independent standard setting body of the IVSC, has the responsibility for developing the drafts from exposure through to final guidance. “Intangible Asset valuation has grown into a truly international discipline over recent years, but is still little understood,” says Chris Thorne, Chairman of the Standards Board. “Raising the awareness and understanding of best practice should in turn lead to investors and others gaining greater confidence in the values attached to business assets such as brands or intellectual property.”