Valuation of Intangible Assets

Client Industry :  Education and Training

Background :

The company owned an intellectual property which was leased out to its related party for support and advancement of education by running institutes based out of campuses all over India. The company had decided to determine the fair value of intellectual party owned for the purpose of restatement in its books. Thus, IBA was approached for conducting valuation of intellectual property for the aforementioned purpose using the valuation standards and appropriate methodology.

Our Approach : 

• Our valuation team worked jointly with the management and finance team of the client to understand the objective for valuation of its intangible asset and the tangible benefits that its related party would get from the use of intellectual property
• We reviewed the revenue forecast of the related party from the use of intellectual property and term of the lease agreement
• Based on above, we conducted the valuation using the most appropriate methodology and computed the fair value of intellectual property for restatement
• We also prepared a valuation report explaining the methodology and assumptions used for arriving at the fair value 

Outcome/Impact :  

We successfully conducted the valuation and computed the fair value of intellectual property within the given timeline. This, in turn, helped the client in closing its books of accounts by the cut-off date.