Valuation of Intellectual Property: A Review of Approaches and Methods

Abstract

Intellectual property plays a crucial role in business performance and has become the central resource in almostall industries. This demands adequate methods for the valuation of IP. In valuation theory three basic approachescan be distinguished: cost approach, market approach and income approach. But these approaches can be appliedto IP only to a limited extent. In this treatise approaches and specific methods for intellectual property valuationare examined and its applicability is critically discussed with a special interest on technical IP. Conditions,weaknesses and frontiers are shown and practical advice is given where possible.