Entrepreneurial Profit

The profit margin that a hypothetical developer would expect to earn for undertaking the creation of an asset, reflecting compensation for development risk, time, and expertise. In intangible asset valuation under the cost approach, developer's profit is added to direct and indirect costs to arrive at the total cost that a market participant would incur.

The estimated cost to create an exact replica of an intangible asset as of the valuation date, using the same materials, standards, design, and technology that were originally employed. Cost of reproduction is one of two cost approach premises (alongside cost of replacement) and produces a higher value estimate because it includes costs associated with features that may no longer be necessary or efficient.

A form of asset value decline that can be economically remedied through repair, upgrade, or redesign at a cost that is less than the resulting increase in value. In the context of intangible assets, curable depreciation might apply to software requiring modernisation or a brand needing repositioning.

The estimated cost to create an intangible asset with equivalent utility to the subject asset as of the valuation date, using current materials, standards, design, and technology. Cost of replacement differs from cost of reproduction in that it does not replicate the exact original asset but rather achieves the same functional capability, thereby automatically eliminating curable functional obsolescence.

A reduction applied to the value of a minority ownership interest to reflect the holder's inability to influence key business decisions such as dividend policy, asset sales, or management appointments. DLOC is the inverse of the control premium and is typically derived from observed control premium data in comparable transactions.

The unintended transfer of knowledge from one firm or sector to others, creating wider economic benefits that the original investor cannot fully capture. Knowledge spillovers are a defining characteristic of intangible investment and a key justification for public policy support of R&D, education, and innovation.

A unique cryptographic token recorded on a blockchain that represents ownership of a specific digital or physical asset, such as artwork, music, collectibles, or virtual real estate. Unlike fungible tokens (such as cryptocurrencies), each NFT is distinct and cannot be exchanged on a one-for-one basis with another.

A contractual feature that gives an investor the right to share in additional value creation beyond a base return, commonly found in preferred equity and mezzanine instruments. Upside participation structures are designed to reward investors for the risk associated with backing intangible-driven growth, aligning their interests with the company's long-term value creation.