The Malaysian Government in January 2018 has allocated RM1.5bil for a guarantee scheme to provide government guarantee to commercial banks to lend money to SMEs by using the Intellectual Property rights and assets of these SME as collateral. Adastra IP represented by its Managing Director Mohan K and IP Valuation Director Christine Ng was invited by the Government Agency SJPP who is administering the IP guarantee Scheme (IPGS) to present our views on Valuation of Intellectual Property Rights for Bank Lending purposes.

Adastra offers competent valuation services for valuation of IP such as patents, trademarks, copyright and designs across multiple market and technology segments. We have professionals trained in area of accounting and finance, business analysts as well as IP experts who all make up our valuation team. Adastra is one of the few certified IP valuer by the Malaysian IP Office.

We have worked with range of clients and assisted them in their valuation requirements from domains such as palm oil to construction industry for various purposes such as sale and acquisition, licensing and royalty determination, equity participation, joint venture and partnerships and other commercial transactions which requires an independent and professional report of the financial value of these IP assets. 

We make use of latest market and business data, along with multi-prong approach towards valuation of any IP. The valuation of intellectual property is a challenging task, since it includes determining present value of an underlying asset against a future technology or product.

The valuation approach and methodology we employ are consistent with the guidelines provided under the International Financial Reporting Standards (IFRS) and the International Valuation Standards (IVS).

Each valuation requires a thorough understanding of the key circumstances and context of the valuation need and the underlying asset and the associated business in question. We generally approach one or more than one of the following in arriving at a value conclusion:

• Income Approach

Determine the value of the IP based on the income it is expected to generate adjusted to present value.

• Cost Approach

Determine the value of the IP by aggregating the direct cost and opportunity cost in the development of the IP

• Market Approach

based on comparison with the actual price paid for a similar IP asset under comparable circumstances

Within each of the approaches are respective methods such as discounted cash flow, relief-from-royalty basis, excess earnings methods, market multiples etc.

Each valuation report will also include a chapter on the analysis on the IP and due diligence of the status of the IP which are critical to the context of the economic contribution of the IP to the underlying business.

Want to know more about unlocking the financial value of your IP? Talk to us for a no-obligation discussion to see if valuing your IP could give you the leverage you need for your business.