ASC 805 identifies types of intangibles the acquirer should consider when conducting an intangible assets valuation. These include:
- Marketing-related assets, such as trademarks, trade names and non-competition agreements
- Customer-related assets, such as customer lists and customer relationships
- Contract-based assets, such as licensing agreements
- Technology-based assets, such as patented technology and software, and
- Artistic-related assets.
The valuation of these assets may involve methodology and nomenclature that is not familiar to first-time acquirers: the relief from royalty method, the multi-period excess earnings method, contributory asset charges, and so on. To complicate matters, the acquirer may need to value acquired liabilities as well, such as deferred revenues or an earn-out agreement.
The valuation of intangible assets also plays a role in the annual test for goodwill impairment under ASC 350 (formerly FAS 142). The value of previously unrecognized intangible assets must be considered when determining if goodwill is impaired.