Valuation of Intellectual Property: A Review of Approaches and Methods

Intellectual property plays a crucial role in business performance and has become the central resource in almost all industries. This demands adequate methods for the valuation of IP. In valuation theory three basic approaches can be distinguished: cost approach, market approach and income approach. But these approaches can be applied to IP only to a limited extent. In this treatise approaches and specific methods for intellectual property valuation are examined and its applicability is critically discussed with a special interest on technical IP. Conditions, weaknesses and frontiers are shown and practical advice is given where possible.