Intangible asset evaluation

The rise in the importance assumed by intangible assets is evidenced by the increasing number of cases of companies that base their very business system on the possession and use of these assets; at the same time, even for more purely “industrial” companies, the weight of intangible assets on the balance sheet is steadily increasing. Consider the gap that exists between the price paid and the book value in the case of extraordinary management operations, such as mergers or combinations: while this surplus value depends in part on the future profitability prospects of the company being acquired, the impact that the valuation of intangible assets not recorded in the accounts has on the determination of the overall value of the company in question should not be overlooked. It happens, therefore, more and more often that business operations of ordinary or extraordinary management can no longer disregard a complete and careful valorization of the intangible assets held by the company: an economic valorization that cannot be reduced to the mere consideration of the book value of the intangibles on the balance sheet. The valuation of intangibles for financial statement purposes requires a common body of knowledge from accounting experts, valuation experts and auditors.

ASACERT is able to address the logic, criteria and peculiarities of such an assessment. Intangible assets, a significant part of the price in acquisition and merger transactions, are also recognized at fair value On the date of the acquisition of control of the acquired entity. The process of allocating the purchase price of the business combination is called
Purchase Price Allocation
(PPA).

ASACERT technicians offer support in identifying acquired intangibles, estimating their useful life, distinguishing between finite-lived and indefinite-lived intangibles, estimating their fair value, choosing criteria for estimating contingent liabilities (earn-outs and claw backs), indemnification assets, repurchased own rights, and defensive assets, and analyzing techniques for judging the quality of the PPA process.