Attributes driving intangible asset valuation / Sani Inusa Milala and Khadijah Md Ariffin

The inherent complexity and subjectivity of assessing assets such as intangible asset, posing challenges for standardized methodologies and accurate financial reporting, this complexity is compounded by the consideration of various valuation criteria, some of which are ill-suited for appraising intangible assets, this study is dedicated to assessing the key attributes that drive the valuation of intangible assets, aiming to construct a comprehensive framework for their valuation. Employing a mixed-methods approach, both quantitative and qualitative research designs were employed, utilizing survey questionnaires, semi-structured interviews, and focus group discussions. Purposive sampling was employed to select participants, and the data analysis involved descriptive and thematic content analysis. The study's findings underscored the paramount economic attributes of intangible assets, highlighting the significance of economic life span and company’s value driver. Conversely, attributes categorized as company’s value distracters were identified as less important, with novelty exhibiting the highest mean value of 4.6. Additional attributes such as originality, legal protection, royalty of the asset and life span right of protection also contributed significantly to the valuation process. Qualitative findings revealed that the market and income methods of valuation are predominant in intangible asset valuation practices. The study demonstrated that the choice of valuation method hinges on information availability, with attributes like economic life span and historic income influencing the value derivation process using income and market approaches. The study concludes by illustrating its findings through the development of a tangible intangible asset’s valuation framework, providing a structured guide for assessing and determining the worth of intangible assets in a more systematic and informed manner.