Intellectual Property Valuation-Intangible Assets and Your Ledger

IP professionals intuitively understand that IP has monetary value and use a number of ways to approximate it, but there is no standardized method for assigning a value to IP.

A number of models exist that are useful to internally assess IP that can help professionals make reasonable decisions in disciplines such as licensing and mergers and acquisitions (M&A). Externally, though, these methods don't conform to Generally Accepted Accounting Principles (GAAP). They don't contain a way of dealing with critical accounting practices such as the principle of prudence or the concept of depreciation. Without a way to address these principles on a ledger, the valuations can't assure reliability and accuracy to other businesses in an accepted way.