Valuations of intellectual properties or other intangible assets require a thorough understanding of their special legal status, in addition to the role they play in enhancing company profits. The Intangible Asset Valuation Services Division of FMV Opinions provides intangible asset valuations and reasonable royalty determinations in a wide range of industries for many purposes including:
|Infringement Damages Intercompany Transfer Price Excise Taxes or Private Inurement Issues Income, Estate, and Gift Taxes Bankruptcy and Reorganization Purchase Price Allocation Lending Decisions Corporate Planning and Governance|
FMV provides damages estimates and other litigation support services in patent, trademark, or copyright disputes. Monetary relief may be based on plaintiff's lost profits or a reasonable royalty for use. Rigor and careful attention to detail characterize our litigation support work. Our valuation experts have considerable experience as witnesses at depositions, trials, and administrative proceedings. We work effectively with the entire client team. Our staff includes highly qualified and experienced professionals, supported by a competent team of research analysts with access to an in-house library as well as public databases.
Transactions between related parties must occur at "arm's-length," conforming with the "commensurate with income" standard, in order to avoid federal or state tax assessments under IRC section 482. FMV provides analyses of arm's-length royalty rates using all currently acceptable transfer pricing methods, including the comparable uncontrolled transaction, comparable profits, profit split, and other methods.
Any transfer of intangible assets, including licensing transactions, between a tax-exempt entity and a related entity is subject to IRS scrutiny. An independent appraisal and royalty rate analysis can help the nonprofit entity's board of directors protect the entity from excise taxes.
Any transfer of intangible assets that triggers the recognition of income, estate, or gift taxes requires a valuation. FMV has particular depth of knowledge in the area of taxation-related valuations and has worked both for the taxpayer and the IRS.
The onset of financial distress presents a unique challenge in an intangible asset appraisal. These assets may have greatly different values in different contexts and, in particular, value in liquidation may be dramatically different from value in use. Businesses and their advisors are increasingly looking to obtain intangible asset analyses in advance of reorganizations to minimize losses to creditors and shareholders.
Financial accounting statements FAS 141 and 142 are the controlling authorities for the allocation of the purchase price of an acquired company. Intangible assets can be subject to complex valuation considerations. In particular, the SEC has been scrutinizing the immediate expensing of the value of acquired "In-process Research & Development" and generating numerous inquiries to registrants who adopt this accounting treatment. The independent status of the appraiser is vital to rendering sustainable opinions in this contentious area.
Firms with significant intellectual properties, but limited tangible assets, often find that their lenders are willing to accept their patents and trademarks as collateral. In these situations, high-quality, supportable appraisals are required to support lending decisions.
The process of value maximization is increasingly becoming a process of identifying the highest and best use for the firm's intangible assets. Creative options for managing a portfolio of intellectual properties include licensing transactions and joint ventures, as well as outright divestitures. Intangible asset appraisals may aid management's planning and provide a basis for performance measurement over time.