The Legend of Weighted Average Return on Assets and Benchmarking Purchase Price Allocation Data
The author's research shows that only current assets, non-competes, and customer relationships have any predictability to WACC in limited industries. In general, when intangibles have significance, their coefficients are negative, which reduces WACC and implied risk. This finding supports the claim by Lev and Gu (2008) that intangibles are important assets, which reduce, not increase risk. The concept that intangible always should have a premium above WACC is unfounded, and the premise of ARM 34 that intangibles are ancillary assets is outdated. The author suggests and alternative method to use purchase price allocation data to support the selection of premiums above WACC.
Goodwill impairments up 23% in 2017
Total goodwill impairment rose to $35.1 billion in 2017, up 23% over the prior year, according to the “2018 U.S. Goodwill Impairment Study” by Duff & Phelps.
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Verizon’s $4.6 billion impairment
What’s in a (brand) name?
Advanced Business Valuation: Global Education by iiBV (eLearning Course)
New Forbes list points up right of publicity issue
When a celebrity passes away, a large chunk of value in the estate may come from the “right of publicity,” which is a form of intellectual property that covers an individual’s name and likeness.
Cryptocurrency—Price Versus Value
Whether you are a skeptic or a believer, cryptocurrencies are more prevalent than ever. Learning the fundamental similarities and differences between valuing cryptocurrency and traditional operating companies is critical for professionals wanting to stay ahead of the curve. Arik Van Zandt and John Sawyer will cover the underlying aspects of how ICOs are raising funds and interests, and what core value drivers, if any, are driving the ICO market. They'll also detail how cryptocurrencies are ...
How to document the life for the projection period with respect to noncontractual customer-related intangible assets
Under the new requirements for fair value for financial reporting, valuation experts will be expected to have a certain amount of documentation in their work files. The new requirements are contained in the Mandatory Performance Framework (MPF) for the Certified in Entity and Intangibles Valuation (CEIV) credential. Regardless of whether you hold the CEIV credential or not, anyone doing fair value for financial reporting should comply with these new rules.
20 questions to ask when performing due diligence for an intellectual property valuation
To analyze and come up with a valuation, you need to perform due diligence to uncover the facts related to the intellectual property. In BVR’s Intellectual Property Valuation Case Law Compendium, expert Thomas Wolfrum (Wolfrum Family Law) suggests asking the following questions. Although the context of these questions were originally for a divorce engagement, many of these questions apply to other engagements where intellectual property (IP) is involved.
New tax law’s impact on intangibles
Under the new tax law, intangibles are more broadly defined than under prior law.
Transfer Pricing and the Valuation of Intangibles
Transfer pricing is widely acknowledged as the top international tax issue for multinational companies with related-party (or controlled) transactions. Frequently these transactions involve intangibles, and the transfer prices assigned to such intangibles transactions are among the most heavily scrutinized by tax authorities across the world. Join Kash Mansori and Guy Sanschagrin for an overview of the regulatory environment governing the transfer pricing of intangibles, and a comprehensive discussion on the valuation methods used by transfer ...
What are the advantages and disadvantages of patents, copyrights, trademarks, and trade secrets?
Empirical evidence suggests that intellectual property (IP) drives a significant portion of the market value of companies today. In Michael Pellegrino’s “Guide to Intellectual Property Valuation,” he presents a set of evergreen due diligence procedures and considerations that practical IP valuation analysts can use today to create credible and defensible IP valuations. One of the most important topics he covers, while fairly basic, is the four types of IP and their advantages and disadvantages.
Global trademark values for wineries
The brand is the single most important intangible asset in wine businesses, accounting for 17.5% of enterprise value on average, according to latest data.
Back-solving Unobservable Trademark Royalty Rates—The Case of ITT vs Xylem Group
Intangible assets like trademarks and patents are typically not traded on active markets, and the measurement of their fair values is based on valuation models that use significant unobservable (Level 3) inputs (i.e., guideline royalty rates under the relief-from-royalty method). Although widely accepted, all authors and lecturers emphasize the difficulties when determining guideline royalty rates under this method. Often, royalty rate analyses fail to survive audit, appeal, or other scrutiny. In developing robust Level 3 ...
IP more prevalent in PPAs, says Houlihan Lokey study
Trademarks and trade names were identified in 50% of M&A deals in 2015, up from 45% in 2014, according to the 2015 Purchase Price Allocation Study from Houlihan Lokey.
Valuation challenges posed by digital assets
Social media, audiobooks, music and video files, bitcoin, and other digital assets pose estate planning and valuation challenges, explains a new paper. A handy checklist is also provided.
Trademark values of global underwear brands
Average royalty rates for underwear trademarks are about 3% on revenues, considerably lower than typical royalty rates signed in license agreements.
Trademark value snapshot of restaurant brands
Analysis of trademark valuation data for restaurant brands reveals that value multiples depend on the price positioning of a particular brand. Full service, sit-down restaurants generate a higher brand value premium than fast food restaurants.
Recent analyses examine extent of intangibles in PPAs
Intangible assets average 30% of the purchase consideration (PC) and goodwill averages 38% of the PC, according to the Houlihan Lokey 2014 Purchase Price Allocation Study. A different analysis of over 6,000 purchase price allocations finds that the ratio of intangible assets to total assets is 72%. This is according to the second edition of Benchmarking Identifiable Intangibles and Their Useful Lives in Business Combinations.