Current issues of intangible assets evaluation

The article dwells upon the problem of intangible assets evaluation. Intangible assets may be the only thing of significant value in the business. This is because: they provide barriers to entry; they differentiate products (even commodities); they can have a long life (e.g. brands / trademarks); they may be capable of being leveraged into new geographic or product markets. An increasing share of the market value of firms appears to derive from their intellectual assets, and firms are managing these assets more actively to identify additional ways of extracting value from them. The paper emphasizes different approaches (cost, market and income) to the evaluation of intangible assets. A cost-based valuation model focuses on the costs incurred to develop the intellectual property. It provides an estimate for the value of the asset that is tied to the cost to create or acquire the asset. Market-based valuation models estimate the value of intellectual property assets by looking to the marketplace. Assets that are comparable to those in question are identified, and the licensing revenue actually derived from those comparable assets in the marketplace is used as an estimate of the value of the new assets. Income-based valuation models make use of forecast future revenues to develop a current estimate of asset value. Under this valuation model, the royalty revenue it can generate in a licensing structure primarily establishes an intellectual asset's value. A special attention is given to reforming the legislation of Ukraine. The process of designating the regular price is analyzed here as well. For the purposes of valuing an intellectual property no single method is employed. Infact a combination of various valuation methods are often employed to reach a final determination of value. Different valuation methods provide different perspectives on an asset's value. Research on valuation methodologies is also never finished. Existing valuation methods will continue to be refined and new methods will continue to be developed.