With the increase in the global intangible value by 1000% in the last 25 years as sourced by Brand Finance, the importance of setting off the knowledge gap in the valuation and recognition of intangible assets has increased. Intangible assets now account for one of the crucial drivers of a company’s value and once managed well over the lifetime can bring significant benefits to the company.
Due to the complexity of valuing the unseen, there is a need for proper interpretation of the related accounting standards, generally accepted principles,
and market norms. Strictly adhering to the recognition criteria – identifiability, controllability, and ability to welcome future economic benefits have exposed the market to more dilemmas.
The diversified portfolio in aforesaid (market-related, technology-related, artistic-related, and contract based) makes it a topic for detailed study and analysis. The challenges that the intangibles asset face in their valuation, either through the cost model or the revaluation model are many. The absence of an active market with respect to unique assets makes it more difficult.