The FINANCIAL -- The International Chamber of Commerce (ICC) has published guidance on intellectual property (IP) valuation to provide business with a common knowledge base for valuing IP assets.
With the help of 30 experts from 15 counties, ICC has released the ICC Handbook on Valuation of Intellectual Property Assets. The ICC handbook serves as a reference for business and valuation professionals.
From large multinational corporations to micro-, small-, and medium-sized enterprises (MSMEs), more and more businesses are conducting IP valuations as part of development and corporate brand strategies. The ICC handbook explains that IP valuations are usually conducted with a broader organisational goal in mind. Business can use IP valuations as part of financial reporting, taxation, mergers and acquisitions (M&A), research and development (R&D), and the sale or purchase of technology licensing.
Dominika Boehm, Strategy and Business Manager, Siemens UAE (previously Senior IP Counsel, Siemens Germany), and Co-Chair Chair of the ICC Task Force on Valuation and Monetisation of IP Assets, said: “IP valuation is becoming an important driver of business decisions across the global economy. By defining the approaches and challenges related to IP valuation, the ICC handbook provides business with the necessary framework to value their assets.”
Paul Bevan, Founder of Central Value Worldwide and Co-Chair of the ICC Task Force on Valuation and Monetisation of IP Assets, said: “IP valuation is a topical issue as companies and investors are increasingly recognising IP as a key driver of overall value. With this trend set to continue, the ICC handbook will enable business to understand and navigate the valuation process moving forward.”
IP valuations are particularly challenging undertakings for business, as they require insights and contributions from professionals across different disciplines, such as tax, legal, and accounting. ICC identifies several variables that may influence the value of IP assets, including context, time, legal status, and geographical reach. External variables, such as legal, technical, or market uncertainties, tax matters, and interest rates are other factors that can contribute to the value of IP assets, according to the ICC handbook.
After outlining variables for preliminary assessments, the ICC handbook offers three methods to help guide business as they conduct IP valuations, including cost, income and market approaches. These approaches contain variations, which allow businesses and valuers to address the specific circumstances of a particular asset.