Strengthening the Valuation of Intangible Assets
As our economies are shifting from industrial to intangible-driven, this poses significant challenges to the financial sector and the valuation profession. Intangible assets now represent a substantial share of enterprise value and play a critical role in licensing, investment, and financing. There is broad consensus that intangible valuation is essential in today’s economy – what is now needed is the alignment of valuation practices with stakeholders’ demand for credible and trusted assessments.
Through close collaboration with leading valuation organizations, the World Intellectual Property Organization (WIPO) is shaping the dialogue and providing guidance on valuation practices that go beyond mechanics and technicalities, helping valuers gain a deeper understanding of the context, complexities and characteristics of intangible assets. Building on this foundation, WIPO will continue to promote best practices for valuing intellectual property (IP) and other intangible assets.
WIPO Submits High-Level Recommendations on Intangible Asset Valuation Guidelines
WIPO has recently submitted its high-level recommendations in response to the public consultation on the proposed Intangible Asset Valuation Guidelines (the “Guide”) jointly developed by the Institute of Valuers and Appraisers, Singapore (IVAS), in collaboration with the American Society of Appraisers (ASA), the Chartered Business Valuators Institute (CBV Institute) and the Royal Institution of Chartered Surveyors (RICS).
The Guide could serve as a complement to existing International Valuation Standards (IVS 210), clarifying practical approaches to assessing the value of intangible assets. Its nine focus areas address the characteristics and influencing factors of intangible assets, their identification as standalone or grouped assets, valuation inputs such as hypothetical royalty rates and economic lives, and additional analyses such as sensitivity testing and consideration of subsequent events.
WIPO’s Contribution and Its Broader Impact
WIPO’s recommendations carefully balance different categories of intangible assets, recognizing the importance of emerging asset types, and are gauged at ensuring practical applicability for valuers while at the same time promoting transparency and consistency for the users of valuation.
By contributing these insights, WIPO helps shape best practices that are not only technically sound but also aligned with the realities of innovators and businesses, enabling them to unlock the value of their IP and other intangibles. This work strengthens the foundation for credible, consistent, and effective intangible asset valuation practices worldwide and ensures that stakeholders have the high-quality information they need for decision-making, ultimately facilitating greater access to capital for innovative and creative enterprises.
Learn more about the proposed Intangible Asset Valuation Guidelines and WIPO’s high-level recommendations letter.