Valuation of Intangible Assets

For various tax and financial reporting reasons, the valuation of a company’s intangible assets may need to be performed. Unlike tangible assets, intangible assets lack physical substance. Intangible assets may be categorized as marketing-related, customer-related, artistic-related, contract-based, or technology-based.  The valuation of intangible assets requires the consideration of the three generally accepted approaches to valuation: the cost, market, and income approaches. Within these applications, however, are subsets specific to the valuation of intangible assets. The value of an intangible asset may be calculated through more than one method, which will be discussed in detail in this article.