Intangible assets represent an increasingly relevant component of an entity's value. However, the value of intangible assets is typically not measured on corporate financial statements unless in a business combination under both generally accepted accounting principles (GAAP) in the United States and International Financial Reporting Standards (IFRS) internationally. Feng Gu and Baruch Lev have been among the strongest critics of valuations that rely upon simple accounting metrics from corporate financial statements, going as far as proclaiming “the end of accounting” and the need to focus on valuation methods that may be driven by non-GAAP key performance indicators (KPIs).1 In this article we present an overview of some of the methodologies for intangibles valuation that build on historical and prospective financial information, using valuation techniques developed from corporate financial theory within the framework of the Financial Accounting Standards Board (FASB) Accounting Standard Codification (ASC) 820 fair value measurement and International...
