RoyaltyStat Blog

Valuation of Intangibles - Future Benefits May Not Be Realized

Posted by Ednaldo Silva on Feb 29, 2016 4:52:49 PM

The present value (“PV”) of intangibles based on projected (unrealized) royalties is speculative. As such, the PV of intangibles determined for tax purpose is mostly advocated by naïve analysts, policy-makers, and tax administrators. It's well-known that the PV of any income-earning asset, including intangibles, can be computed by using a weighted sum formula: