SVS No. 07 Valuation of Intangible Assets


Issued by Valuation Standards Committee in Taiwan on 28 September ,2012


This Statement establishes the basic principles and application guidance for valuation of intangible assets. An intangible asset means: (i) a non-monetary asset that does not have physical substance but is identifiable and embody future economic benefits; or (ii) goodwill. When valuers undertake valuation of intangible assets, they should confirm the nature and characteristics of intangible assets, decide applicable standard of value, analyze appropriate valuation approaches and methods, and weigh all facts and inputs of the valuation results.
This Statement also provides application guidance for commonly used valuation approaches and methods, including income-based approach, market-based approach, and cost approach. The principal valuation methods under the income-based approach are excess earnings method, premium profits method and royalty savings method. An example of the market-based approach is the market transactions method. In addition, we provide replacement cost method and reproduction cost method under the cost approach. Above all, income-based approach is the most commonly used approach for valuation of intangible assets. Therefore, this Statement focuses on the explanation and application of this approach.
Finally, this Statement requires valuers should follow Statements of Valuation Standards No. 03 Valuation Report to report the value conclusion. Valuers should also abide by the disclosure requirements of this Statement.

Effective date

This Statement is effective from 1 May, 2011.

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