Calculated intangible value (CIV)

Calculated intangible value (CIV),

Definition of Calculated intangible value (CIV):

  1. Calculated intangible value is a method of valuing a company's intangible assets. This calculation attempts to allocate a fixed value to intangible assets that won't change according to the company's market value. An intangible asset is a non-physical asset. Examples of intangible assets include patents, trademarks, copyrights, goodwill, brand recognition, customer lists, and proprietary technology.

  2. Because an intangible asset has no physical form and isn't easily converted to cash, calculating its value can be challenging. However, there are times when calculating the value of intangible assets becomes critical. For example, owners looking to sell their company may hire a business appraiser to specifically value the company's intangible assets.

  3. Method of quantifying the market value of intangible assets it employs the following data: (a) firms pretax earnings and return on assets (ROA) for the last three years, (b) average ROA in the firms industry for the last three years, and (c) average income tax rate for the last three years. CIV is computed by (1) multiplying the firms assets by the industrys ROA, (2) subtracting the result from the firms pretax earnings to get the premium attributable to the firms intangible assets, and (3) dividing the premium by the firms cost of capital to get its net present value (NPV).

How to use Calculated intangible value (CIV) in a sentence?

  1. Examples of intangible assets include brand recognition, goodwill, patents, trademarks, copyrights, proprietary technology, and customer lists.
  2. A calculated intangible value (CIV) is a method of valuing a company's intangible assets, which are assets that are not physical in nature.
  3. The CIV takes into consideration factors such as a company's pretax earnings, a company's average return on tangible assets, and the industry's average return on tangible assets.

Meaning of Calculated intangible value (CIV) & Calculated intangible value (CIV) Definition