Fair Value

The International Financial Reporting Standard that defines fair value, establishes a framework for measuring it, and requires disclosures about fair value measurements. IFRS 13 introduces a three-level hierarchy based on observable market inputs and is foundational to the valuation of intangible assets in financial reporting.

The US GAAP standard that defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The price at which an asset would change hands between a willing buyer and a willing seller, neither being under compulsion to transact, and both having reasonable knowledge of the relevant facts. Fair market value is the standard used in most asset valuation contexts.

The price that would be received to sell an asset or cash generating unit in an orderly transaction between market participants (IFRS 13), less the costs of disposal. Under IAS 36, it is one of two measures used to determine the recoverable amount for impairment testing.

A valuation methodology that estimates the value of an asset based on observed prices in actual market transactions involving comparable assets. The market approach is used to value intangible assets when reliable transaction data or licensing royalty rates are available, and is one of the three primary approaches alongside the income and cost approaches.

The profession and practice of recording, classifying, and reporting financial transactions to provide stakeholders with accurate information about an organisation's financial position. In the context of intangible assets, accountancy plays a critical role in determining how items such as goodwill, intellectual property, and customer relationships are recognised, measured, and disclosed under frameworks like IFRS and UK GAAP.

Deemed cost is a defined term in IFRS 1, First-time Adoption of International Financial Reporting Standards: an amount used as a surrogate for cost or depreciated cost at a given date. It gives a first-time adopter a practical starting measure for certain assets in its opening IFRS statement of financial position, in place of reconstructing their full cost history.

The formal, auditable record of the intangible assets a business owns, with each asset individually named, described and classified against the Opagio 12 intangible value drivers. It is the output of Guided Asset Discovery, the first step of The Opagio Method, and it exists because the accounting standards leave most intangible value undocumented: IAS 38 and FRS 102 Section 18 prohibit recognising internally generated intangibles on the balance sheet, so brand, software, customer relationships, data and know-how built in-house appear nowhere in the filed accounts.

What is the IAS 38 revaluation model for intangible assets?

IAS 38 permits revaluation of intangible assets to fair value if an active market exists, but this is rarely used in practice because active markets for most intangible assets do not exist.

What are the IFRS 3 disclosure requirements for intangible assets?

IFRS 3 requires disclosure of intangible assets recognised, valuation methods used, fair values assigned, goodwill amount, measurement period adjustments, and key assumptions for each business combination.

How much does intangible asset valuation cost?

Professional intangible asset valuations typically cost £15,000-£100,000+ depending on the number of assets, complexity, deal size, and whether the valuation must withstand auditor or regulatory scrutiny.

What does an intangible asset valuation report typically contain?

A valuation report includes an executive summary, scope and purpose, asset identification, methodology for each asset, detailed calculations, key assumptions, sensitivity analysis, and conclusions.