Intellectual Property (IP)
We offer credible audits, valuations and transfer pricing advice specific to our clients’ needs. The value of IP in any business should never be underestimated and we have extensive experience in identifying, auditing and calculating true market value. In addition, where our client’s business is involved in international trade, we understand that the IP it uses impacts on its exposure to transfer pricing adjustments.
Our advisory services assist in structuring mergers and acquisitions, purchase-price negotiations and resolving related tax and transfer pricing issues.
Transfer Pricing investigations by the fiscal authorities focus increasingly on the role played by IP and IP-related intangibles in the cross-border pricing of products and services between connected parties. We assist businesses to identify and quantify the impact of these intangibles on prices, and thereby reduce exposure to potential adverse transfer price findings.
IP valuations identify all the core-competencies of a business or business unit that have been reduced to IP material form. They also assess the IP rights enjoyed by the business in respect of these forms (for example, pending applications or registered rights in patent, design or trade mark material; material subject to copyright protection or which is protectable as and by way of their trade secret nature); and rights in and to third party intellectual property used under licence, where these licences are transferrable; while establishing how each of these categories of rights, and also the underlying means by which their subject matter is commercially implemented (for example, in systems, processes, etc.), would optimally be deliverable to an interested third-party acquirer.
Typically, value is arrived at by an assessment of the contribution (relative to other key drivers in the business unit in which the IP is used), to revenue generation and operating profitability – and by means of parallel analysis of competitive activity, the duration and extent to which these revenues and operating profitability, are sustainable.
IP valuation can, for the above reasons, provide strategic analysis and be a useful management tool, particularly as it will tend to expose and render transparent any unappreciated value, and provide substantiation of the value inhering in a business for business disposal purposes. It can also provide the metrics necessary to set licensing fees and rates, should the business wish to licence any of its IP to third parties.