IVS 210 (Intangible Assets)
Definition
IVS 210 is the International Valuation Standards asset standard that governs how intangible assets are valued, and it is the framework a credible IP valuation for lending must follow. When a lender advances against patents, trade marks or other intangibles, it relies on a valuation prepared to a recognised standard so that the figure supporting the loan-to-value can withstand credit scrutiny, and IVS 210 intangible assets is that standard. It sets out three approaches. The income approach captures the economic benefit the IP generates, using methods such as Relief-from-Royalty, the Multi-Period Excess Earnings Method (after deducting contributory-asset charges), the With-and-Without method, the Greenfield method and the Distributor method. The market approach draws on guideline transactions in comparable rights. The cost approach reflects the outlay to recreate the asset. Key inputs matter as much as the method: the discount rate is reconciled against a weighted average return on assets (WARA); economic life is assessed, which is distinct from an accounting or tax useful life; and a Tax Amortisation Benefit is added under the income approach. For lending, valuers apply conservative assumptions consistent with IVS 210 and the 2025 IVS edition, which renumbered the bases of value to IVS 102 and reporting to IVS 106. A UK example: an independent valuer values a scale-up's patent estate for a bank's IP-backed facility using Relief-from-Royalty, reconciling the royalty rate to the low end of an observed range and using a finite economic life rather than a perpetuity, so the collateral value is defensible on default. For borrowers, an IVS 210-compliant valuation is what turns intangibles into bankable security; for advisers, it is the baseline every lender's credit team expects before it will size a facility against IP.
Complementary Terms
Concepts that frequently appear alongside IVS 210 (Intangible Assets) in practice.
IVS 106 is the International Valuation Standards reporting standard that governs how a valuation is documented and communicated. It sets out what a valuation report must contain so that its user, in IP-backed lending the lender's credit team, can understand the basis of value, the premise, the approach and the assumptions behind the figure and rely on it.
An income-based valuation technique that estimates the value of an intangible asset by calculating the present value of hypothetical royalty payments the owner is relieved from paying by owning the asset. The method is commonly applied to value trademarks, patents, technology, and trade names in both transaction and financial reporting contexts.
A valuation technique that estimates the value of an intangible asset by comparing the projected cash flows of a business with the asset to those without it. The difference in present value represents the asset's contribution and is commonly used to value non-compete agreements, assembled workforces, and technology assets.
A charge applied in the Multi-Period Excess Earnings Method (MPEEM) to deduct the fair return earned by other assets that contribute to the cash flows being valued. Contributory asset charges ensure that the residual earnings attributed to the subject intangible asset are not overstated by stripping out returns earned by tangible assets, working capital, and other identified intangibles.
The present value of future tax savings arising from the amortisation of an intangible asset for tax purposes. The tax amortisation benefit is often added to the pre-tax value of an intangible asset in purchase price allocations and can represent a material component of the asset's overall fair value.
A valuation methodology that estimates the value of an asset based on the present value of expected future economic benefits, such as cash flows, earnings, or cost savings. The income approach is the most widely used method for valuing intangible assets and includes techniques such as the relief-from-royalty and multi-period excess earnings methods.
The process of determining the fair value of assets pledged as security for a loan, specifically adapted for the requirements of lending rather than accounting or tax purposes. Collateral valuation for intangible assets differs from standard intangible asset valuation in several important ways: it emphasises liquidation value rather than value-in-use, it considers the transferability of the asset to a hypothetical buyer in a forced-sale scenario, and it applies conservative assumptions reflecting the lender's need for downside protection.
Related FAQ
What loan-to-value ratio do lenders offer on intellectual property?
Indicatively, IP loan-to-value runs from around 20-40% in the broader market up to roughly 50% for registered, insurance-backed rights, against an orderly-disposal rather than going-concern value.
Read full answer →How is IP valued for secured lending?
IP is valued to a credit standard under IVS 210, using income, market or cost approaches, then adjusted to an orderly-disposal figure. That collateral value, tested for saleability, sets the loan-to-value.
Read full answer →What valuation standard does a lender need, IVS or RICS?
Both. Lenders expect a valuation prepared under IVS 210 for intangible assets and delivered to the RICS Red Book, whose VPGA 6 and Appendix A set out how to value IP for debt financing.
Read full answer →Put this knowledge to work
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