ICC Handbook on Valuation of Intellectual Property Assets

Intellectual property (IP) rights are now widely recognised as valuable assets and frequently play an important role in business strategy and overall corporate value. The valuation of IP assets has consequently grown in importance, as these become a major part of many companies’ value and a driver of important market transactions.

Given the many different aspects of an IP valuation process — such as IP, legal, accounting and tax — it is often challenging for the different professionals involved to approach the process unless they have a common understanding of this subject.

To help businesses navigate this increasingly important area, ICC developed this handbook with the help of a 30-strong group of experts in different domains (such as tax, accountancy, customs, and intellectual property) from 15 countries to ensure a multidisciplinary and international approach.

This handbook addresses the various aspects of the IP valuation process including:

• The particularities and challenges of valuing IP assets compared to other categories of assets.
• The many variables which may influence the value of IP assets — including the types of IP rights at stake, the larger valuation context, the purpose of the valuation, and the moment in time in which it takes place.
• The definitions of IP valuation adopted by relevant organisations and the importance of standards as a basic framework and guidance tool in IP valuation processes.
• The main purposes for undertaking IP valuation.
• The main approaches to valuing IP assets (i.e. cost, income and market and their variations).
• Aspects to consider in a preliminary analysis (before applying any of the approaches) to identify the context of the IP asset.
• Steps to follow in the process of IP valuation under each of the main valuation approaches.
• Valuation in international taxation, including transfer pricing of intangibles, and the impact of IP rights on the customs value of goods to be imported.
• Recent and anticipated developments in the IP landscape with impact on the valuation of IP assets.

This handbook will be a useful reference tool for both business and valuation professionals, and will facilitate consistent approaches to valuation of intellectual property, which has become an indispensable component of international trade, investment, and economic development.