What do we understand by Intangible Assets?
Intangible assets are all those elements that contribute to the development and proper functioning of a company without the existence of a physic element that supports it.
Elements that are capable of creating future income, that determine the economic entry for other competitors and improve the company’s financial return.
All companies should be capable to determine its Intangible Assets economic value, whether it’s as a whole or separately.
We could say that Intangible Assets are made of:
- Marketing Intangibles: Trademarks, Trade Names, Copyrights, Internet Domains, Commercial Know-How…
- Manufacturing Intangibles: Patents, Utility Models, Industrial Designs, Technical Non-disclosed Know-How, Commercial Secrets, Inventions, Formulas, Manufacturing Processes, Industrial Copyright…
- Mixed Intangibles: the Company’s Reputation, Business Models….
Do the Intangible Assets have any value?
Of course, sometimes, it’s equal or even greater than the value of tangible assets, although, it’s frequent that these types of assets are not valued.
This results from various causes including the complexity concerning valuation, the absence of clearly defined legal frameworks, as well as the fact that this valuation is voluntary and even that sometimes the company doesn’t even know it has a valuable intangible asset for the company’s activity.
How do we value Intangible Assets or one of its elements?
Normally, the valuation is a fusion between the economic concept of value and the juridical concept of property. Intangible assets can be measured as a whole, but it’s always advisable to have an individual valuation of each asset in case we have to make a transaction with it.
There are three reasonable methods to valuate assets:
- Based in the market, they are directly related with what has been obtained in a previous transaction of that same asset or from similar ones.
- Based on the cost, like the “creating cost” or “substitution cost” of a specific asset, they derive from the principle that there’s an existing relation between cost and value.
- Methods that result from an estimation of economic benefits (also called income methods).
Which industrial and intellectual method for asset valuation do we use at ‘Herrero & Asociados’?
At HERRERO & ASOCIADOS we are aware that each and every method proposed is limited, so we have created our own valuation method, respecting and following international standards established in the UNE 166008:2012 regulation.
In which cases can our service help companies?
- To grant licenses.
- To make investment decisions.
- To obtain funding
- When buying and selling
Advantages given from our service to our clients:
- Examine and audit the company’s intangible portfolio (patents, utility models, trademarks, trade names, corporate names, industrial designs, computer programs and other creations protected by copyright, industrial secrets…).
- Analyze the value of a specific asset in its market segment.
- Line up its portfolio strategy with its general business strategy.
- Obtain the maximum output from its Intangible Assets as a business tool.
- Positive business image.