Valuation for determining license/royalty rates

Intangibles are ubiquitous in every business, but the value of such assets can vary significantly, depending on the extent of legal protection available and the owner's ability to create strong entry barriers. The key challenges in valuing intangibles are the availability of asset-level information and comparable transactions multiples. This is especially true when intangibles are fairly unique and different from available market data. A deep understanding of the intangibles, their commercial viability, legal protection and a great degree of professional judgement are required for carrying out intangibles valuations relating to licensing of intangibles leading to royalty etc. Valuation of intangible assets could be arrived at by a combination of income, cost, market or royalty approaches. Valuations in special situations demand a thorough understanding of the situation and the intangible assets in question. Intangible assets could take various shapes and forms - software, intellectual properties, customer contracts, workforce, goodwill, licenses, brands & trademarks and many other forms.

Estimated Time

1 - 4 weeks

Price Range

INR 12,000-20,000/man day

Scope of Work

Depending on the specific requirement of the business and the intended use/purpose of the valuation, we tailor the scope of the valuation and the output. When appropriate, our valuation report provides an overview of the company, industry, economy; discusses value drivers; outlines the analysis performed, along with the inputs and assumptions; and incorporates detailed exhibits that support our valuation conclusion. The valuation analysis is sound and the report is defensible. We assist our clients to arrive at the Business / Share Value by using a combination the Income Approach (DCF), Comparables, Transactions and/or Asset based approach among others.

Documents Required

Documents required include the following: 1. Historical audited financial statements for past 2-3 years 2. Financial projections for next 5 financial Years for the intangible and/or business 3. Latest financial statements and/or trial balance 4. License related specific information