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.
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.
Basis of value is the fundamental assumption about the transaction and parties that a valuation measures - in effect, the precise question the valuer is answering. Under the International Valuation Standards the basis of value is a formal statement (renumbered to IVS 102 in the 2025 edition, previously IVS 104) that must be selected and disclosed before any figure is produced, because the same intangible asset can carry very different values depending on which basis is chosen.
Revenue attributable to IP is the portion of a business's income that can be reasonably traced to a specific intellectual property asset rather than to the enterprise as a whole. Isolating revenue attributable to ip is central to both valuation and lending, because it demonstrates that the intangible is a genuine, separable driver of cash generation rather than an inseparable part of goodwill.
The RICS Red Book is the professional framework, formally the RICS Valuation – Global Standards, that governs how RICS-regulated valuers carry out and report valuations. It sits alongside the International Valuation Standards and adds mandatory professional requirements, and for IP-backed lending its Valuation Practice Guidance Application 6 (VPGA 6) and the accompanying guidance on the valuation of intellectual property rights are the reference points.
Further Reading
What royalty rate is used to value IP for lending?
There is no single fixed rate. Valuers derive it from comparable market licences for similar IP, and for lending they deliberately use a low-end, conservative rate to avoid overstating collateral value.
Read more →Related FAQ
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 →What is a WARA reconciliation in intangible valuation?
A WARA reconciliation checks that the returns assigned to each asset, weighted by value, reconcile to the overall business return (the WACC). It is a sanity test confirming individual discount rates are internally consistent.
Read full answer →What advance rate applies to intangible assets?
There is no fixed rate. Intangible assets are valued case by case, with broad-market lending around 20–40% of appraised value and insurance-backed facilities reaching up to roughly 50%.
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