Intangible Assets Valuation
Valuation of intangibles: Trademarks, Patents, Copyright infringement, Brands, Franchises, Customer contracts, Non-competition agreements, Software. Issue Independent Valuation Report for companies to claim writing-down allowances under Section 19B, Singapore Income Tax Act.
Intangible Assets Valuation (IFRS compliant)
We provide you with independent and accurate analysis and valuation opinions of your intangible assets and intellectual property (IP) during corporate exercises like acquisitions of local or overseas companies via asset or share transfer, initial public offering (IPOs) and commissioned special audit reviews. Our reports are submitted and validated by the Singapore Exchange, local bankers, auditors, corporate finance houses, investors and lawyers.
Our intangible assets and IP valuation services include:-
- Customer relationships
- Franchises
- Distributions and publicity rights
- Technological inventions and software copyrights
- Trademarks and patents
- Business contracts
- Purchase Price Allocation
- Calculation of goodwill impairment
- Options valuation
- Shares valuation
- Bond valuation
Intellectual Property Rights Valuation*
A company may claim writing-down allowances (“WDA”) on capital expenditure incurred in acquiring qualifying Intellectual Property Rights (“IPR”), subject to the conditions under Section 19B of the Singapore Income Tax Act (“ITA”).
The following are the various types of qualifying IPRs under Section 19B of the ITA:
- Patents;
- Copyrights;
- Trademarks;
- Registered designs;
- Geographical indications;
- Lay-out designs of integrated circuit;
- Trade secrets or information with commercial value; and
- Plant varieties.
The Comptroller of Income Tax or IRAS requires a valuation of the intellectual property rights (“IPRs”) to be made by a qualified valuer such as a Certified Valuation Analyst, Chartered Valuer & Appraiser (CVA) or Chartered Accountant, to determine the open market price of the qualifying IPRs when the capital expenditure incurred is: (a) greater than SGD 0.5 million (for a related party transaction (b) greater than SGD 2 million (for an unrelated party transaction).
* the above source is adapted from IRAS website
Our achievements include:-
Best Intellectual Property Rights Valuation Firm South East Asia at APAC Insider Business Awards 2022
As part of the APAC Business Awards 2022, APAC Insider awarded Max Lewis Consultants with the Best Intellectual Property Rights Valuation Firm in South East Asia. The award honours the most deserving individuals and companies who have shown significant growth and perseverance in the face of the pandemic, securing a position as a true business leader throughout the region.
The Singapore Business Awards is one of the awards hosted by APAC Insider with an aim to identify and promote individuals and businesses that work relentlessly to improve the economy and ensure it flourishes. In the year of 2022, the award winners come from various industries such as finance, interior design, cybersecurity, and more. Regardless of the company’s size, an internal research team judged every candidate for the award purely on merit. The final decision was made based on several factors, including longevity, growth (quick or sustainable), corporate success, diversity, stakeholder input, key inventions, and so on.
The APAC Business Awards is a prestigious long-running awards programme that recognises and values individuals and businesses that stand out above the rest. This award further cements Max Lewis Consultants’ position as a leading intellectual property rights valuation firm in Singapore and South East Asia.
Trademark Valuation
- Successfully performed 1 trademark valuation report for a food and beverage MNC covering China, Malaysia, Taiwan, Hong Kong and Russia.
- Successfully carried out 3 trademarks valuation report for the purpose of sale between related companies for Hush Puppies, a renowned retail lifestyle distributor of footwear apparel in Singapore, Malaysia and Indonesia.
- Successfully carried out trademark valuation report for a local providing Muay Thai fitness training mobile gym, which operates out of a truck that travel all over the island of Singapore, including Sentosa, to conduct open group classes as well as private classes for individual, corporates, groups and schools.
Section 19B, Singapore Income Tax Act
- Performed valuation of trademark under Section 19B for an international e-commerce for the purpose of claiming wear and tear allowance.
- Performed fair valuation of a renowned trademark for claiming wear and tear allowances under Section 19B for a manufacturer of caffeinated soft drinks distributed under their brand which was marketed in China, Hong Kong, Macau, Taiwan and Myanmar.
- Performed valuation of trademark under Section 19B for a industrial automation MNC who acquired a trademark from an overseas related company for the purpose of claiming wear and tear allowance.
Brand Valuation
Successfully valued a retail food brand amounting to $30 million.
Royalties Valuation
Successfully valued royalties for an online payroll solutions company in Singapore and Malaysia.
Patent Valuation
- Valued patent rights belonging to biotechnology company.
- Valued a technology patent for a roof-top solar installation.
- Valuation of an e-commerce technology patent.
- Valuation of a patent for a data-centre.
- Valuation of a portfolio of approximately over 100 registered patents for a Japanese electronics appliances MNC for the purposes of claiming wear and tear allowances under Section 19B of the Singapore Income Tax Act.
Valuation of Non-compete Agreement
Successfully valued a non-compete agreement for a MNC involved in dispute with employees.
Our team consists of highly qualified in-house experts:
- Chartered Valuer & Appraiser, Institute of Valuers and Appraisers, Singapore;
- International Certified Valuation Specialist, IACVA;
- Certified Valuation Analyst, National Association of Certified Valuators and Analysts;
- Chartered Business Valuer, Canadian Institute of Chartered Business Valuators;
- Certified Business Valuer and Registered Business Valuer, Australian Valuers Institute;
- Member, American Society of Appraisers;
- Asia Pacific Institute of Experts;
- Completed the Certified Patent Valuation Analyst course.
Why is the valuation of intangible assets important?
Intangible Assets valuation is one of the latest developments where intangible assets such as trademarks, patents, copyright infringement, franchises, brands, customer contracts, and non-competition agreements need to be valued as a separate class of assets by organisations and companies. Some of the reasons include the following:
- Identifying the right price
Valuation of such intangible assets or intellectual property rights (IPR) is important in order to know what’s the price offered to be bought or sold. In this way, neither the buyer won’t make the mistake of overpaying for an asset, and the seller will not mistakenly accept a discounted price for it.
- Mergers and Acquisition
Intangible Assets valuation is essential when two companies are merging or if a company is being acquired since it helps both sides determine the actual value of the hidden value of the intellectual property rights contained in the business-like brand names or trademarks.
Section 19B of the Singapore Income Tax Act
A company can claim writing down allowances (WDAs) on capital expenditures incurred on the acquisition of qualifying Intellectual Property Rights (IPRs) for use in its business or trade under Section 19B of the Singapore Income Tax Act.
For the purpose of Section 19B, the qualifying IPRs are:
- Patents;
- Copyrights;
- Trademarks;
- Registered designs;
- Geographical indications;
- Lay-out designs of an integrated circuit;
- Trade secrets or information with commercial value; and
- Plant varieties.
How are intangible assets valued?
Intangible assets should be valued by a certified or accredited valuer or appraiser. Valuators mainly use one of the three following methods for the valuation of intangible assets: the cost, market, and income approaches. It is important to note, however, that within these applications, there are subsets specific to the valuation of intangible assets. It is possible to calculate the value of an intangible asset in more than one way. Value indications that can be validated through more than one method increase the reasonableness of the value conclusion.
What are some examples of intangible assets?
An intangible asset is an asset that is not physical in nature. Intangible assets add value to your business even though they do not have a physical presence. Some examples of intangible assets are intellectual property rights, such as trademarks, patents, copyrights, franchises, brands, customer relationships or contracts, and non-competition agreements.
What are the difficulties in the valuation of intangible assets?
One of the common difficulties in the valuation of intangible assets is identifying what counts as an intangible asset in the first place. Business managers should value each Intangible asset as a separate class when valuing Intangible Assets. Besides putting the price tag on brands, trademarks, patents, copyrights and more, other aspects of a business can be included on the list. Capital spent on research and development into new products or expenditure can also be included.
When should an intangible asset be recognised?
After determining that an item is an intangible asset, the entity must determine if it also meets the recognition criteria. It is only possible to recognise an intangible asset if the cost can be measured reliably, and the entity has foreseeable future economic benefits (for example, revenues from the sale of products) attributable to the asset.
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