Michael D. Moberly – December 13, 2023
Valuing intangible assets emerges from 2+ decades of research and engaging leaders – management teams of and investors in small-medium-sized enterprises across sectors and stages of innovation development, its clear most hold, navigate by, and rely on unique (sets-collaborations) of intangible (non-physical) assets.
- However, the contributions and valuations of those intangible assets are frequently nebulous with limited relevance and duration.
Valuing intangible assets in early-stage and/or R&D dependent businesses (mission essential) intangible assets should include the various forms, contexts, and/or applications of…
- know how (intellectual capital).
- processes-procedures (structural capital), and
- operating culture (relationship capital), which
leadership endeavor to harness, collaborate, and apply in the right way, at the right time, at the right cost.
Valuing intangible assets using the contributory role methodology espoused here advances these requisites to business development and sustainability by differentiating the (mission essential) intangible ingredients and inputs which most businesses, across sectors, now rely, and depend.
The contributory role methodology for valuing intangible assets advocates valuation of those intangible assets commence by recognizing (differentiating, measuring, and assessing) their actual, differentiable, and measurable contributions, e.g., how, when, where, resilience, etc.
The contributory role methodology for valuing intangible assets allows for the revelation and examination of specific contributions of particular-intangible assets for specialized valuation, which arguably should not presumptively be fixed, standardized, or durational.
- For example, business internal initiatives to advance – strengthen – expand brand, standing, offerings, reputation, and/or product-service attractivity, etc., are developed with and dependent on inputs and collaborations of specific types, forms, categories, contexts, and/or applications of the right intangible assets, ala intellectual, structural, and relationship capital.
- The convergence and external promotion – communication of those-particular (the right) intangible assets, at the right time, in the right way, and at the right cost, can, and should be resilient, durable, and sustainable over long periods of time, and valued accordingly.
- And all can be more effectively – lucratively leveraged and advantaged with relevant monitoring, and introduction of relevant safeguards, and risk mitigation.
The contributory role methodology for valuing intangible assets benefits business leaders, management teams, boards, operating cultures, and investors. However, many are unfamiliar with or do not feel obliged to recognize every business initiative is underwritten by inputs of the right intangible assets, at the right time, in the right way, at the right cost.
- Those inputs of intellectual, structural, and relationship capital which execution and outcomes rely, and depend, are often un-or-under-recognized, appreciated, and valued.
- Too, the issuance of IP (which is always based on – underwritten by intellectual and structural capital) is frequently misconstrued as representing some semblance of (permanent) valuation.
The contributory role methodology for valuing intangible assets remedies these and other challenges and probable risks they pose, to benefit the developers – holders of ‘mission essential’ intangible assets in near-term.
However, there remain convention-laden (accounting, valuation) perspectives which portray valuation of business things intangible as being less relevant, until inputs have commenced and outcomes (products, contributions of same, etc.) are observable, distinguishable, measurable, and definable in accordance with conventional standards.
The contributory role methodology contends businesses have advanced well beyond many of those conventions, ala…
- 70 – 80+% of most business’s valuation, competitiveness, revenue generation capability, capacity, and sustainability is attributable to intangible (non-physical) assets. Intangibles | Brookings – Unseen Wealth: Report of the Brookings Task Force on Intangibles on JSTOR – Intangible Assets: Computers and Organizational Capital | Brookings
- intangible asset intensity – dependency – reliance relate across business sectors and transactions, irrespective of size, stage of development, sales, products, services, or location. Boom of Intangible Assets Felt Across Industries and Economy – UCLA Anderson Review
The contributory role methodology for valuing intangible assets asserts differentiation and valuation of particular-intangible assets can reliably – projectably occur earlier, e.g., strategizing, modeling, planning, and investing stages.
This contributory role methodology for valuing intangible assets describes conventional methods (for distinguishing – valuing business’s intangible assets) are generally, (a.) quite standardized, (b.) ‘snap-shots-in-time’ and (c.) presume the duration of contributions and valuation is not indeterminate, rather of limited duration.
The Business Intangible Asset Blog was created in 2006 and now includes 1100+ topic specific posts intended to provide readers, ala business leaders, management teams, R&D administrators, boards, and investors, etc., with reliable insights to the application, valuation, competitiveness, revenue generation, and sustainability contributions of intangible assets.
Posts at Business Intangible Asset Blog are intended to draw attention to the development, application, management, safeguards, and risk mitigation of business’s ‘mission essential’ intangible assets.
kpstrat is a Business Intangible Asset Strategy – Risk Mitigation Collaborative.
Readers of this post are respectfully invited to explore other – similar posts, along with books, pamphlets, and papers available @ ‘Business Intangible Asset Blog’ and kpstrat.com.
