Valuation of other intangible assets Sample Clauses

Valuation of other intangible assets. The valuation methods for patented technology mainly include the market approach, cost approach and income approach. The market approach is a common and effective method for countries and regions with relatively developed technological and capital markets. Under this valuation method, the same or similar patented and proprietary technologies in the market are selected as references, and comparison and adjustment are made in relation to the price difference between the patented and proprietary technologies with the references through stimulation taken into account of various factors affecting the value such as the functions of the patented and proprietary technologies. By analyzing the results of various adjustments, the value of the patented and proprietary technologies was determined. The market approach is used to valuate patented and proprietary technologies on the condition that the relatively public market data and the comparable references are available, and such references have clear influential factors on value which can be quantified. Functional simulation method is largely used in the market approach. As China’s patented and proprietary technologies market is still under development at present, the environment for protection of such technologies is also less regulated. Meanwhile, the piracies of products based on patented and proprietary technologies make it relatively difficult to collect fair transaction data of such products. Therefore, it is rather difficult to apply the market approach in the valuation of patented and proprietary technologies in China at present. The cost approach is the most mature method to valuate the value of patented and proprietary technologies application. As there is no explicit socialized market for self-use patented and proprietary technologies within some enterprises and industry or their market capacity or demand is low, it is usually difficult to determine the value of products based on the patented and proprietary technologies by reference to the sale of such products (the revenue of products based on the dedicated or self-use patented and proprietary technologies are mostly implied in the overall benefits of the enterprise or industry). Therefore, the adoption of cost approach for valuation is relatively objective and feasible. In addition, for products based on patented and proprietary technologies which have not been launched on the market, the adoption of cost approach for valuation is more persuasive. To g...
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