BV301-OOO - Valuation of Intangible Assets

Registration

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Course Description

This course is the first of two courses required for those who already hold the ASA Desigation and are seeking a Specilaty Designation in Intangible Assets.  This course focuses on key principles and real world applications in the valuation of intangible assets.  This four-day course includes internationally recognized guidance developed for the valuation of intangible assets in a financial reporting context including audit requirements for fair value matters. 

Instructional Methods

Methods include lectures, discussions and individual/ group exercises and assignments. 

Course Audience

This course is relevent for individuals that value intangible assets for tax, litigation, financial reporting and other purposes.

Suggested Prerequisites

While this course is open to all who wish to enroll, the following suggested prerequisites may provide for a more meaningful student experience:

• Degree in finance and/or accounting;
• At least two years of business valuation experience;
• Six months’ or more experience performing or reviewing intangible asset appraisals; and
• General familiarity with fair value guidance.

Advanced Preparation

For detailed insights on intangible asset valuation, students should read:

• The Appraisal Foundation, Best Practices for Valuations in Financial Reporting: Intangible Asset Working Group, The Identification of Contributory Assets and the Calculation of Economic Rents, issued May 31, 2010;
• AICPA Practice Aid entitled Assets Acquired to Be Used in Research and Development Activities, issued 2013;
• The Appraisal Foundation, The Valuation of Customer-Related Assets, exposure draft issued December 5, 2013;
• The Appraisal Foundation, The Measurement and Application of Market Participant Acquisition Premiums, discussion draft issued April 16, 2013;

For insights on relevant rules impacting fair value, students should review:

• IFRS 13, Fair Value Measurement;
• ASC 820, Fair Value Measurements and Disclosures;
• International Financial Reporting Standard (“IFRS”) 3, Business Combinations; and
• Accounting Standard Codification (“ASC”) 805, Business Combinations.

NASBA and Continuing Professional Education (CPE) Credit

The American Society of Appraisers is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors.  State boards of accountancy have the final authority on the acceptance of individual courses for CPE credit.  Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website www.learningmarket.org.

CPE Credit: Up to thirty (30) CPE credits in Specialized Knowledge
Program Level: Advanced
Delivery Method: Only group-live courses are approved for CPE
Policies: ASA's Refund and Cancellation Policy and ASA's Complaint Resolution Policy

Agenda

Topics are covered in the following order:

Section 1: Overview

• Importance of Intangible Assets;
• History, Background, Reasons to Value; and
• Definitions

Section 2: Important Issues in Financial Reporting

• Prior IPR&D Valuation Concerns;
• Key Financial Reporting Issues;
• Rules for Identification of Intangibles Apart from Goodwill; and
• Audit Requirements.

Section 3: Overview of the Three Valuation Approaches

• Intangible Asset Valuation Theory;
• Selection of Valuation Approaches and Method within Each Approach;
• Principles Associated with Each Valuation Method; and
• Tax Treatment of Intangibles.

Section 6: Overview of the Income Approach

• Overview of Various Methods;
• Selection of Appropriate Method;
• Market Participant vs. Entity Specific Assumptions;
• Rates of Return;
• Types of Projections;
• Customer Related Intangibles and Technology Intangibles Issues; and
• Economic Life vs. Amortization Life.

Section 8: Income Approach – Excess Earnings Method

• Overview and Theory;
• Identification of Primary Income Generating Assets;
• Revenue Estimates – Life Cycle and Attrition Estimates;
• Expense Adjustments;
• Contributory Asset Charges; and
• Discount Rate.

Section 4: The Cost Approach

• Theory, Application, Key Issues; and
• Examples to Highlight Theory and Application.

Section 5: The Market Approach

• Theory, Application, Key Issues.

Section 7: Income Approach – Relief from Royalty Method

• Overview, Key Issues;
• Discussion of Royalty Rate Estimation;
• Examples to Highlight Theory and Application;
• Profit Split Method;
• Overview of Assumptions; and
• Examples to Highlight Theory and Application.

Learning Outcomes

Upon completion of this course, students will be able to:

• Understand the importance of intangible assets in today's economy;
• Identify intangible assets;
• Fully understand the three (3) approaches to valuation (cost, market and income);
• Select proper valuation methods for different types of intangible assets;
• Select proper discount rates for different types of tangible and intangible assets; and
• Much More!