IVSC aims to ‘demystify’ valuation of intangibles

The adoption of International Financial Reporting Standards (IFRS) has greatly increased the need for improved information and consistency when valuing intangibles, especially in the context of cross-border mergers and acquisitions, joint ventures, and other investment arrangements. However, too often a disconnect results between “the book value of companies and the real market value of their intangible assets,” says Chris Thorne, President of the International Valuation Standards Council (IVSC) in a new release. To assist practitioners and to “help demystify the whole process so that it becomes more comprehensible to investors around the world,” the IVSC has just published its updated Guidance Note 4 on valuing intangible assets, including brands, customer relationships, IP, and goodwill.

The IVSC is also collaborating with The Appraisal Foundation on developing best practice guidance in specific areas where such authority is currently lacking, including the valuation of customer relationships and the identification and valuation of control premiums.