There are three methods for evaluating intangible assets: cost method, market method, and income method. The evaluation method is directly related to the evaluation results.

Cost method

The cost method is to calculate the cost required to replace or reconstruct a certain type of intangible assets. It is applicable to the calculation of the value of intangible assets that can be replaced. It can also estimate the economic benefits brought about by intangible assets that reduce production costs, reduce raw material consumption or prices, reduce waste and more efficient use of equipment, thereby evaluating this part. The value of intangible assets.

Market value method

The market method is also called the market value method. The value of intangible assets is determined based on market transactions, which applies to patents, trademarks, copyrights, etc. Generally, the license fee for the above-mentioned intangible assets is calculated as a percentage of revenue based on the agreement reached by the parties to the transaction.

Income method

This method calculates the value of intangible assets based on the economic benefits of the intangible assets or the present value of future cash flows. Such as goodwill, franchised agency, etc. The key to this method is how to determine the appropriate discount rate or capitalization rate.