Contributory Asset Charge
Definition
An economic rent attributed to the contributory assets that support the generation of cash flows from a specific intangible asset in a multi-period excess earnings method valuation. Contributory asset charges represent the return required by supporting assets — including working capital, fixed assets, and other intangibles — and must be deducted from total cash flows to isolate the earnings attributable to the intangible asset being valued.
Related Terms
Related FAQ
What is Contributory Asset Charge (CAC) in MPEEM?
CAC is the fair return an intangible asset would need to generate if all other assets (working capital, fixed assets, technology, brand) were separately valued — used in MPEEM to isolate the subject asset's earnings.
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