Home  Journals  International Accounting  10(352) - 2015 March

Methods of intangible assets valuation

Available online: 16 May 2015

Subject Heading: COST ACCOUNTING AND CALCULATION OF VALUE

JEL Classification: 

Pages: 39-53

Importance Today, Russian enterprises undervalue the role of intangible assets as part of their property, and do not pay proper attention to their valuation and amortization.
     Objectives The main objective of this article is to analyze the methods of intangible assets valuation, and preference of their usage for valuation of different kinds of intangible assets, and advantages and disadvantages of these methods. We consider some aspects of intangible assets amortization.
     Methods Using the system approach, we disclosed the concepts of intangible assets, intangible assets amortization and useful life. We also identified approaches to their valuation, considered the risk-return ratio, and methods of charging amortization of intangible assets.
     Results We identified great impact of intangible assets on enterprise operations and generated profit. We studied approaches to intangible assets' valuation in Russia, and named the most optimal ones. We considered differences between amortization methods under the Russian and international accounting standards. The proposed methods of valuation and amortization may have practical application; however, there should be a thorough analysis of the essence of intangible assets, enterprise's operations, the structure of assets and the market.
     Conclusions and Relevance We conclude that the valuation of intangible assets has not achieved proper level of development in Russia. We substantiated the need for improvement of intangible assets' valuation methods to maintain and enhance competiveness and financial stability of a company.

Keywords: intangible assets, valuation, income approach, cost approach, market approach, comparative approach, high technology, method, initial cost, replacement value, incremental cash-flow method, multi-period excess-earnings method, relief from royalty method, advantages in revenues, comparative intangible assets, amortization

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