Exactly how is the value of an Intellectual Property (IP) asset determined? This is a question that many people, including evaluators as well as lawyers ask each and every day. The answer may seem easy enough, but it is actually a complex process in order to determine the value. Because there are so many different ways to determine value, it is possible to have several answers to that one question.
The worth of a particular IP asset is dependent upon the method used to determine the value. The problem is that there is no consistency in the values obtained. One may actually find a different answer each time a different method is used. In addition, the answers may vary widely.
At the present time, there is no central authority available to set standards for the IP valuation process or to confirm that the valuations are fair and accurate. This reality can create problems. In addition, this issue can create problems across the globe since IP value is used in order to assess corporate worth.
There are several groups that are trying to get a single IP valuation standard to be used. These groups include the US financial Accounting Standard Baord as well as the International Financial Accounting Standard Board. However, all of these groups have been unsuccessful in their efforts.
There are a number of reasons why these groups have been unsuccessful. This includes:
The exact role of IP valuation is not very clear. Is IP valuation an accounting tool or something else? The answer to that question would change whether you asked a lawyer or an accountant. Developing a standard would mean that various professional communities across the globe would have to come to an agreement. Each group has a vested interest in making sure that the IP valuation method most favorable to their particular niche be used. Assets come in a variety of types. This means that the method used to determine valuation may need to differ depending upon the asset type. Terms used to describe assets can vary in meaning in different areas. For example, terms used by lawyers may have different meaning to accountants.Although this task is difficult, the global recession has given a sense of urgency for the need to develop a consistent process. Indeed, the IP asset process has received intense scrutiny across the globe. This is especially due to the fact that the markets have been fluctuating greatly.
Both corporate and IP professionals declare that it is important to determine a process for determining value. This is necessary not only to achieve consistency and minimize market fluctuations, but it is also necessary to reduce the number of unethical IP valuations.
Because of the failures of the past, most groups now believe that agreement upon one standard may not be possible. Instead, it may be necessary to develop a framework which could assist in simplifying the process of IP valuation.
What does this mean for investors and others? This means paying attention to the new developments that will be happening in the IP valuation field. It is highly likely that any recommended changes will be brought forth in stages instead of all at once.
By remaining focused on the process, lawyers and others can ensure that they will know about the latest IP valuation tools and methods as soon as such things are available.
Improve the Bottom Line: Here's How to Capture Value of Intellectual Property Key Features of Trademark Management Software Intellectual Property and the Economics of Entertainment Benefits of Understanding the Value of Your IP Starting Your Career As An Intellectual Property Lawyer
0 comments:
Post a Comment