Client Request
The client engaged our firm to perform an independent intellectual property valuation of its proprietary software as at the valuation date. The objective of the engagement was to determine the fair value of the intellectual property, consisting of a software-based solution incorporating multiple technical applications designed to support optimisation, planning and operational efficiency within construction and real estate-related projects.
Project Overview
The subject intellectual property comprised a proprietary software integrating four specialised technical solutions developed for the construction and real estate sector. These solutions focus on project optimisation, technical planning and process improvement throughout various stages of construction-related activities. The engagement involved the valuation of the Company’s proprietary software as an intellectual property asset. As part of the selected valuation approach, the analysis considered the software’s ability to generate future economic benefits based on its ongoing commercial use and existing licensing structure.
Approach and Methodology
The valuation was performed using the Income Approach, specifically applying the Relief-from-Royalty (“RFR”) Method, which estimates value based on the hypothetical royalty payments avoided though ownership of the intellectual property. The methodology involved forecasting future revenue attributable to the software, applying an appropriate royalty rate benchmark and discounting the resulting after-tax royalty savings using a discount rate derived under the Capital Asset Pricing Model (“CAPM”).
Scope and Execution
- Methodology: Relief-from-Royalty Method (Income Approach)
- Deliverables: Intellectual Property Valuation Report and supporting valuation analysis
- Delivery Time: Completed within 2 weeks from project initiation
Outcome
The engagement resulted in a well-supported valuation conclusion. The analysis provided the client with an independent and technically supported assessment of the intellectual property’s fair value, supported by market-based assumptions, industry research and recognised valuation methodologies.