Frequently Asked Questions
Expert answers to the most common questions about intangible assets, valuation methods, productivity measurement, and business growth.
Fundamentals
What are the main types of intangible assets?
The seven main categories are: technology and IP, customer relationships, brand and marketing, human capital, data assets, contractual rights, and artistic/creative assets.
Read full answer →What is an intangible asset?
An intangible asset is an identifiable non-physical asset that generates economic value — such as patents, brands, customer relationships, software, and proprietary data.
Read full answer →What is the difference between tangible and intangible assets?
Tangible assets are physical items like machinery, property, and inventory. Intangible assets are non-physical items like patents, brands, software, and customer relationships that often represent the majority of a company's value.
Read full answer →How much of a company's value is intangible?
For S&P 500 companies, over 90% of market capitalisation is attributed to intangible assets. For typical SMEs, the proportion ranges from 50-85% depending on the industry and business model.
Read full answer →Valuation
How do you value intangible assets?
Intangible assets are valued using one or more of six recognised methods: Relief from Royalty, Multi-Period Excess Earnings, Cost Approach, With-and-Without, Greenfield, and Market Approach.
Read full answer →How do intangible assets affect company valuation?
Intangible assets typically represent 70-90% of enterprise value in modern companies, directly influencing revenue multiples, EBITDA margins, and acquisition premiums.
Read full answer →What is the Relief from Royalty method?
The Relief from Royalty (RFR) method values an intangible asset by estimating the royalty payments a company avoids by owning the asset rather than licensing it from a third party.
Read full answer →How do you measure brand value?
Brand value is most commonly measured using the Relief from Royalty method, which estimates what the business would pay to licence its brand if it didn't own it, discounted to present value.
Read full answer →What is an intangible asset valuation report?
An intangible asset valuation report provides a formal, documented assessment of the fair value of a company's intangible assets using recognised valuation methodologies.
Read full answer →What discount rate should I use for intangible asset valuation?
Discount rates for intangible assets typically range from 10-25%, reflecting higher risk than the overall business WACC. Customer relationships sit at the lower end, while in-process R&D commands the highest rates.
Read full answer →What is the Multi-Period Excess Earnings Method (MPEEM)?
MPEEM isolates the earnings attributable to a single intangible asset by deducting charges for all other contributory assets from total earnings, then discounting the residual cash flows to present value.
Read full answer →Productivity
What is Total Factor Productivity (TFP)?
TFP measures the portion of output growth that cannot be explained by increases in labour or capital inputs — it captures the efficiency gains from innovation, technology, and better management.
Read full answer →What is growth accounting?
Growth accounting is a framework that decomposes economic or business output growth into contributions from labour, capital, and productivity (TFP).
Read full answer →What is Gross Value Added (GVA)?
GVA measures the value a company creates by subtracting intermediate consumption (purchases of goods and services) from total revenue — it's the firm-level equivalent of GDP contribution.
Read full answer →What is the Solow Residual?
The Solow Residual is the portion of output growth that cannot be explained by growth in labour and capital inputs — it represents Total Factor Productivity growth, which is largely driven by intangible assets.
Read full answer →Accounting
What is the difference between goodwill and intangible assets?
Goodwill is the residual value paid above the fair value of all identifiable net assets in an acquisition. Intangible assets are specific, identifiable non-physical assets like brands, patents, and customer relationships.
Read full answer →Can you capitalise intangible assets on the balance sheet?
Yes, under IAS 38 and ASC 350, intangible assets can be capitalised when they meet specific recognition criteria — but internally generated goodwill and many R&D costs must be expensed.
Read full answer →What is purchase price allocation (PPA)?
PPA is the process of allocating the total price paid in a business acquisition across the acquired company's identifiable tangible assets, intangible assets, liabilities, and goodwill.
Read full answer →Finance
What is EBITDA and why does it matter for valuation?
EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortisation) strips out financing and accounting decisions to show a company's core operational profitability — it's the most common valuation metric in M&A.
Read full answer →Investment
How do private equity firms value portfolio companies?
PE firms typically use a combination of EBITDA multiples, discounted cash flow (DCF) analysis, and comparable transactions, with increasing focus on identifying and valuing intangible assets that drive sustainable growth.
Read full answer →What is AI washing?
AI washing is the practice of exaggerating or fabricating a company's use of artificial intelligence to attract investors, customers, or higher valuations — similar to greenwashing in ESG.
Read full answer →What is a venture capital fund?
A venture capital fund pools money from limited partners (LPs) to invest in early-stage, high-growth companies in exchange for equity, typically targeting 3-5x returns over a 7-10 year fund life.
Read full answer →How do you value a startup with no revenue?
Pre-revenue startups are valued using the Scorecard Method, Berkus Method, or Comparable Transaction approach — all of which focus on the team, technology, market opportunity, and intangible asset quality rather than financial metrics.
Read full answer →Tools
How does Opagio's Productivity Calculator work?
The calculator uses growth accounting methodology to decompose your revenue and GVA growth into contributions from labour, capital, and Total Factor Productivity (TFP).
Read full answer →Still have questions?
Get in touch with the Opagio team for a free consultation about your intangible assets.