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SVS No. 07 Valuation of Intangible Assets
Status
Issued by Valuation Standards Committee in Taiwan on 28 September
,2012
Summary
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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