Greenfield Method
Definition
A valuation technique that estimates the value of an intangible asset by modelling the cash flows of a hypothetical business that starts from scratch ('greenfield') with only the subject asset in place, building up all other assets over time. The greenfield method captures the head-start value of having the intangible asset from inception. It is commonly used to value regulatory licences, broadcasting rights, and other enabling intangible assets where the asset provides a right to operate rather than direct earnings.
Related Terms
Related FAQ
What is the Greenfield method and when is it applicable?
The Greenfield method models what it would cost to build the business from scratch using only the subject intangible asset, estimating years to profitability and required investment.
Read full answer →What is the Greenfield method and when is it used for intangible valuation?
The Greenfield method values an intangible asset by modelling the cash flows of a hypothetical start-up business that owns only that single asset and must build everything else from scratch.
Read full answer →How do fintech companies value their licences and regulatory approvals?
Fintech licences (FCA authorisation, e-money licences, banking licences) are valued using the Greenfield or cost approach, reflecting the time, cost, and uncertainty of obtaining them independently.
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