Companies today realize that a substantial portion of value is associated with intellectual property such as trademarks, brand names and patents as well as other intangible assets including non-compete agreements and technological know-how. In many cases, intangible assets are a company’s most important assets. Typically, intangible assets are categorized as follows:

	Marketing related - trademarks, patents, brand names
	Technology related - proprietary technology, technical expertise
	Contract related - non-compete agreements, licenses
	Human capital related - skilled workforce, workforce in place
	Customer related - customer and referral relationships
	Computer - software
	Goodwill related - going-concern value

Several methods may be appropriate in determining an intangible asset’s value. Typically, the asset’s economic benefit is measured through incremental revenues and expenses. This benefit can be measured by comparing actual income to income available if the intangible asset did not exist (e.g. the income stream lost if a non-compete agreement was not in place and a colleague left a firm). To ensure an accurate valuation, the degree to which the intangible asset enhances the value of other associated assets must be understood.

Intangible asset valuation is a detailed process that includes the complete understanding of the business operations and the intangible asset’s impact on the business, as well as sensitivity analysis. An appropriate valuation involves a thorough analysis of the factors that support and enhance value in a business. Adams Capital has substantial experience valuing intangible assets for the purpose of mergers and acquisitions, licensing, transfer pricing, asset impairment and business valuations.

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