Know How Intangible Assets Contribute to Valuation…

Michael D. Moberly, Principal, Founder kpstrat and ‘Business Intangible Asset Blog’

Today, and for the foreseeable future, the valuation of business assets, is…

  • less about the tangible (physical) assets amassed, i.e., inventory, property, equipment, or facilities, etc., and
  • more about the intangible (non-physical) assets in play, i.e., proprietarily developed + held, and their specific contributory roles to brand, reputation, competitiveness, revenue generation, and operating culture.

Importantly, valuation of intangible assets, i.e., the buy – sell ‘asking price’, should reflect the assets’ sustainability, durability, resilience to risk, and longevity, etc., and if either ‘advantage’ is wholly transferable to another operating culture.

More specifically, prospective buyers of business things intangible are (fiduciarily) obliged to hold a ‘clear – insightful portrait’ of which, how, when, why, and where the intangible assets sought

  • are relevant to the ‘valuation’, i.e., their contribution to revenue generation, competitive advantage, growth potential, and materialize in operating culture.
  • may be vulnerable to arrays of ‘reputational – brand’ risk, i.e., undermining, devaluation, misappropriation, adulteration, and dis-information, etc., and how either can materialize – cascade (asymmetrically) @ keystroke speeds @ the will of others, i.e., economic – competitive advantage – ideological adversaries.

Affirming the (current, projected, and sustainable) valuation of particular- intangible assets in play to a buy transaction, is indispensable to…

  • mitigating expensive ‘momentum stifling’ delays, setbacks, and/or postponements to transferring + applying coveted intangible assets.

It’s beneficial for prospective buyers of (existing) ‘intangible assets’ to recognize their valuation must translate and transfer, e.g.,

  1. introduce new – additional collaborative – connective ‘material’ to a business, and a
  2. appealing – sustainable narrative can emerge and be conveyed to customers, clients, and consumers.

Readers appreciate the experiential emphasis of kpstrat and ‘Business Intangible Asset Blog’, lie with particular-types-categories of business things intangible

  • intellectual capital – relevant knowledge, know how, and expertise.
  • structural capital – ways relevant processes, procedures, methods, and developments are-differentiated, treated, applied to products and services.
  • relationship capital – business’ alignment with relevantassociations, sources, organizations, customer-client-consumer interests, and regulatory-oversight…

Wherever, whenever, however either of the above (individually, collectively, collaboratively) are (a.) in play, they should be distinguished as to their (b.) measurable contributions to valuation, and (c.) convergence as appealing – lucrative components to business operating culture for competitiveness, reputation, and revenue generation.

Business’s seeking to sell their, or buy – incorporate others (existing) intangible assets, such endeavors are obliged (good, better, best) to incorporate relevant levels of…

  • pre-post transaction due diligence specific to the intangible assets in play.

Doing so can substantiate valuation, mitigate risks, and avoid what all-to-often become ‘costly and momentum stifling delays and/or headaches’ relative to the assets…

  • transferability, stability, fragility, collaboration, and vulnerability to specific risks,
  • which should there be incompatibility, adversely affect whether the assets can sustain those contributions.

The ‘Business Intangible Asset Blog’ is experientially researched, written, and produced by Michael D. Moberly, to provide readers (business leaders, management teams, boards, and investors with reliable perspectives and nuanced insights to distinguish, value, and safeguard business things intangible designated as mission essential. 

Readers of this, and other posts, @ Business Intangible Asset Blog’ are-encouraged to offer comments.

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