Running Head: Methods used for Accessing the Value of Intangible Assets
Collaborative Research Paper, Group 2
February 27, 2011
can be just as valuable as or even more so than physical assets in many cases.
include: patents, copyrights, trademarks, franchises, and goodwill.
Like physical assets they can
also be bought or sold.
Accounting for intangible assets is also similar to the accounting for
physical assets; their initial valuation is their original cost, which includes the cost of purchasing
or developing the asset.
The major exception is accounting for the certainty of the future value
of the intangibles (Spiceland, Sepe, and Nelson, 2011).
The methods used to access their present
and future values vary depending on many things, such as, the success of the company and its
product or service, or the type of intangible asset.
As indicated by Spiceland, Sepe & Nelson (2011), a patent is defined as an “exclusive
20-year right to manufacture a product or use a process” (Spiceland et al., 2011, p. 503).
According to Wikipedia, “patents in the modern sense originated in 1474, when the Republic of
Venice enacted a decree that new and inventive devices, once put into practice, had to be
communicated to the Republic to obtain the right to prevent others from using them”.
have since gained widespread usage and are a big part of the operation of today’s businesses,
making their proper valuation important ("Patent," n.d.).
The nature of a patent makes its valuation very difficult.
As indicated by Wanetick
(2010), there are large number of factors that go into valuing a patent (Wanetick, 2010, p. 64-
In many cases, a combination of intangible asset valuation approaches are used in valuing
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