ex_banham


Intangible Assets Information Request
A. Copyrights
1. List of all copyrighted registrations.
2. List of works (articles, books, paintings, etc.).
3. Identify copyright names that are associated with products and/or services (such as software or report templates).
4. Identify historical sale of products and/or services employing the works for the last five years
5. Projection of products and/or services that will employ the works for the next five years.
6. Details of licensing transaction(s) (in or out) of any copyrighted works.
B. Customer Relationships
1. Customer sales history for the last five years for the top ten customers.
2. Complete customer history for the last five years (this would be for lifing).
3. Financial data representing annual costs for the last five years associated with developing/soliciting new customers.
4. Schedule of new customers gained in each of the last five years with sales.
5. For the last five years, number of customers in a given year that failed to purchase in the following year, including those customers’ sales for the prior year.
C. In-Process Research and Development
1. Description of the in-process research and development.
2. Description of the competitive advantages and disadvantages of the in-process research and development.
3. Description of industry trends and competitive pressures that may affect the useful life of the in-process research and development.
4. In light of C.2. and C.3. above, estimate the useful life of the in-process research and development.
5. Cost records documenting development of the in-process research and development, including:
(a) Person hours to develop;
(b) Various technical levels of persons working on the assignment;
(c) Pay scales for individuals in C.5.b.; and
(d) Information to determine overhead rate.
6. In the absence of historical cost records, estimate corporate effort to re-create the in-process research and development, including:
(a) Who would work on the assignment (employees and consultants);
(b) Pay rates for individuals in C.6.a.; and
(c) Information to determine overhead rate.
7. Projection of products and/or services that will employ the in-process research and development for the next five years:
(a) Projection of revenues including licensing income for the life span of the in-process research and development;
(b) Projection of direct expenses associated with producing revenue in C.7.a.; and
(c) Summary of indirect expenses (i.e., overhead).
D. Know-How
1. Description of know-how, including competitive advantages and disadvantages.
2. Description of industry trends and competitive pressures that may affect the useful life of the know-how.
3. In light of D.1. and D.2. above, estimate the useful life of the know-how.
4. Products or services that employ the know-how.
5. Historical cost records documenting development of the know-how, including:
(a) Person hours to develop;
(b) Various technical levels of persons working on the assignment;
(c) Pay scales for individuals in D.5.b.; and
(d) Information to determine overhead rate.
6. In the absence of historical cost records, estimate corporate effort to re-create the know-how if it were to be developed from scratch, including:
(a) Who would work on the assignment (employees and consultants);
(b) Pay rates for individuals in D.6.a.; and
(c) Information to determine overhead rate.
7. Historical sale of revenues for products and/or services employing the know-how for the last five years.
8. Know-how associated with products and/or services:
(a) Provide projection of products and/or services that employ the know-how for the next five years;
(b) Project direct expenses associated with producing revenue in D.8.a.; and
(c) Obtain or develop indirect expenses (i.e., overhead).
9. Details of licensing transaction(s) (in or out) of any know-how.
E. Patent
1. Summary of patents held by the company.
2. Copies of patent applications and patent abstracts.
3. Distinguish which patents have commercial applications (i.e., are producing or are reasonably forecast to produce revenue in the future).
4. Historical cost records documenting development of the patent(s):
(a) Person hours to develop;
(b) Various technical levels of persons working on the assignment;
(c) Pay scales for individuals in E.4.b.; and
(d) Information to determine overhead rate.
5. Identify patents and associated products that now have or are expected to have commercial viability:
a. Projection of revenues related to patent over the life of the patent; and
b. Projection of direct expenses associated with producing revenue in E.5.a.
6. Comment on the possibility of extending patent protection beyond statutory life of patent.
7. Details of licensing transaction(s) (in or out) of any patents.
F. Software
1. Describe the function of the software.
2. For Cost Approach:
(a) If available, please provide historical cost records documenting development of the software, including:
(1) Person hours to develop;
(2) Various technical levels of persons working on the assignment;
(3) Pay scales for individuals in F.2.a.(2); and
(4) Information to determine overhead rate.
(b) In the absence of historical cost records, estimate effort to recreate the software if it were to be developed from scratch, including:
(1) Who would work on the assignment (employees and consultants);
(2) Pay rates for individuals in F.2.b.(1); and
(3) Information to determine overhead rate.
3. Lifing/Obsolescence:
(a) What was the expected useful life at inception and at valuation date. Obtain support for estimate;
(b) When was software actually placed in use;
(c) Describe internal development that may extend life;
(d) Describe internal development of replacement software that might shorten life; and
(e) Describe external factors that may affect life.
4. For Income Approach:
(a) Obtain historical revenues applicable to software;
(b) Project revenues including licensing income for lifespan of software;
(c) Project direct expenses associated with producing revenue in F.4.b.;
(d) Obtain or develop indirect expenses (i.e., overhead); and
(e) Identify expenses, direct and indirect, not associated with acquired software.
G. Proprietary Processes/Products Technology
1. Description of the proprietary process/product technology.
2. Description of competitive advantages and disadvantages of the proprietary process/product technology.
3. Description of industry trends and competitive pressures that may affect the useful life of the proprietary process/product technology.
4. In light of G.2. and G.3. above, estimate the useful life of the proprietary process/product technology support.
5. Historical cost records documenting development of the process/product technology:
(a) Person hours to develop;
(b) Various technical levels of persons working on the assignment;
(c) Pay scales for individuals in G.5.b.; and
(d) Information to determine overhead rate.
6. In the absence of historical cost records, estimate effort to recreate the process/product technology if it were to be developed from scratch:
(a) Who would work on the assignment (employees and consultants);
(b) Pay rates for individuals in G.6.a.; and
(c) Information to determine overhead rate.
7. Historical sale of products and/or services employing process/product technology for the last five years.
8. Projection of products and/or services that employ the process/product technology for the next five years:
(a) Projection of revenues including licensing in come for the lifespan of process/product technology;
(b) Projection of direct expenses associated with producing revenue in G.8.a.; and
(c) Obtain or develop indirect expenses (i.e., overhead).
9. Details of licensing transaction(s) (in or out) of any technology.
H. Trademark/Trade Name
1. List of all trademark/trade name registrations.
2. List of trademark/trade names that are not registered.
3. Identify trademarks/trade names that are associated with products and/or services.
4. Identify historical sale of products and/or services employing trademarks/trade names for the last five years.
5. Projection of products and/or services that employ the trademarks/trade names for the next five years.
6. Details of licensing transaction(s) (in or out) of any trademarks/trade names.
  Disclaimer Excluding Any Warranties: This checklist is designed to provide guidance to analysts, auditors and management but is not to be used as a substitute for professional judgment. These procedures must be altered to fit each assignment. The practitioner takes sole responsibility for implementation of this guide. The implied warranties of merchantability and fitness of purpose and all other warranties, whether expressed or implied, are excluded from this transaction and shall not apply to this guide. The Financial Valuation Group shall not be liable for any indirect, special, or consequential damages.
  Copyright 2004. FVG Holdings, LC and FVG California Partnership, Inc.
All rights reserved. Reprinted with permission.

SPONSORED REPORT

How to make the most of a negotiation

Negotiators are made, not born. In this sponsored report, we cover strategies and tactics to help you head into 2017 ready to take on business deals, salary discussions and more.

VIDEO

Will the Affordable Care Act be repealed?

The results of the 2016 presidential election are likely to have a big impact on federal tax policy in the coming years. Eddie Adkins, CPA, a partner in the Washington National Tax Office at Grant Thornton, discusses what parts of the ACA might survive the repeal of most of the law.

QUIZ

News quiz: Scam email plagues tax professionals—again

Even as the IRS reported on success in reducing tax return identity theft in the 2016 season, the Service also warned tax professionals about yet another email phishing scam. See how much you know about recent news with this short quiz.