Title: The valuation of intellectual property

Authors: D.J. Neil

Addresses: Managing Director, D.J. Neil Ltd, Macclesfield, Cheshire SKlO 2EX, UK

Abstract: Ideas with the potential for exploitation for profit constitute intellectual property, the characteristics of which suggest that it should be considered as a capital asset for the purposes of valuation. The case for using cash flow earnings as opposed to accrued profits as a yardstick for assessing capital projects is reviewed and a method is proposed for the valuation in exchange of intellectual property, based on the application of discounted cash flow analysis to cash flow projections prepared with the aid of simple Bayesian techniques.

Keywords: intellectual property; valuation; capital assets; exploitation; sunk costs; Bayesian risk analysis; price bounds; cash flow earnings; discounted cash flow.

DOI: 10.1504/IJTM.1988.026030

International Journal of Technology Management, 1988 Vol.3 No.1/2, pp.31 - 42

Available online: 26 May 2009 *

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