Amortization Tax Benefits and the Fair Value of Intangible Assets
Fair value for an acquired intangible asset can be estimated through consideration of a discounted cash flow analysis. The tax benefit from amortization of the intangible asset is included as a benefit in development of the future cash flow benefits. The mathematical link between the amortization inclusive intangible asset value and the amortization exclusive intangible asset value is derived and presented for valuation application.Abstract
Contributor Notes
Richard K. Ellsworth is with Deloitte Financial Advisory Services. He is an Accredited Senior Appraiser (ASA) in Business Valuation as well as a licensed professional engineer (PE) and a Charter Financial Analyst (CFA). The views expressed in this article are those of the author and do not necessarily represent the views of Deloitte Financial Advisory Services LLP.