Intellectual Property and Intangible Asset Valuations may be required for several different reasons. For example, an allocation of purchase price may be required for financial reporting or tax purposes. Valuations of this type of property may also be required for litigation assignments dealing with, but not limited to, patent infringement, trademark violations, breaches of covenants not to compete, divorce, etc. An allocation of purchase price may be performed for either tax or financial reporting purposes. Each of these assignments will be accomplished based on the applicable set of rules for the intended purpose.

Internal Revenue Code Section 1060 requires that when a business is acquired, a valuation must be performed to support the allocation of the total purchase price to the component parts for income tax purposes. The law requires a uniform allocation of the purchase price based on an appraisal of the underlying assets. The IRS pays close attention to these transactions to ensure that the purchase price allocation is reasonable and is treated consistently by both the purchaser and the seller. An inappropriate or inconsistent allocation of the purchase price can result in an increased tax liability and, in some instances, penalties.

In addition to allocating the purchase price for tax purposes, generally accepted accounting principles (GAAP) also require these types of valuations. The valuation analyst is frequently being called on to provide valuation services with respect to pronouncements made by the Financial Accounting Standards Board (FASB). This may also require an impairment study to be performed for the purpose of writing off intangible assets such as goodwill.

Trugman Valuation Associates has experience in valuations of these types of assets for a variety of purposes.

Examples of the types of assets valued include:

• Patents, Literary Rights, Copyrights, etc.
• Tradenames & Trademarks
• Licenses
• Other Royalty Generating Assets
• In-process R&D
• Software
• Core Technologies
• Contracts in Place
• Customers / Subscribers / Members
• Site Designs
• Work Force in Place
• Goodwill –Personal and Commercial
• Non-compete Agreements