Intangible assets — such as patents, copyrights, trademarks and customer lists — can have substantial value. But, unless they’re purchased from a third-party, you might not know what they’re currently worth. For example, if a business cultivates a well-known brand over several years using internal resources, it won’t appear on its balance sheet. Owners of intangibles need to know the value of these assets in various situations. For example, the value of intangible assets may be relevant when buying or selling a business, reporting acquired intangibles under U.S. Generally Accepted Accounting Principles (GAAP), licensing rights to or joint venturing with a third party, and litigating asset infringement or breach claims. The value of intangibles also can be important in matters such as divorce settlements and estate...

Intangible assets — such as patents, copyrights and trademarks — are essential to the operations of many companies, but they’re rarely reported on the balance sheet. And even when they are reported due to an acquisition, book value is often based on historical cost under U.S. Generally Accepted Accounting Principles (GAAP). However, historical cost may not represent current market value, especially if the acquisition happened long ago and the asset’s value has appreciated over time. Valuing intangible assets is essential in many situations, including shareholder disputes, divorce cases, infringement claims, and gift and estate planning. So how do you determine what intangibles are worth in today’s volatile marketplace? Critical factors When valuing intangible assets, business valuation professionals generally consider the following factors: The economic benefits, direct or indirect,...