Cost approach and market transaction

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Question

Consider the following four valuation methodologies.

1. cost approach (the after tax cost which would be incurred in reproducing the asset)

2. market transaction (actual transaction value for identical or similar asset based on an arm's length market transaction)

3. income method (excess earnings: the present value of future earnings generated by the intangible asset net of a reasonable return on other assets contributing to the stream of earnings)

4. income method (relief from royalty approach: the present value of the likely future royalty stream which would be earned from licensing out the intangible asset to a third party)

Reference no: EM13510830

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