Tax Amortization Benefits and Intangible Asset Valuation
Intangible asset value is frequently estimated through consideration of a discounted cash flow analysis. Included as a component of the future cash flow forecast is the tax amortization benefit from amortizing the value of the intangible asset. The amortization tax benefit creates incremental cash flows associated with the intangible asset and reflects the income tax shield attributable to amortization of the asset over its tax life.
Contributor Notes
Richard K. Ellsworth has more than forty years of global experience in the valuation of power, renewable energy, and infrastructure assets. Rick has also performed asset life expectancy and depreciation studies using the Iowa survivor curves for a variety of tangible assets along with performing appraisal review services. He is a licensed Professional Engineer (PE), an Accredited Senior Appraiser (ASA), a Chartered Financial Analyst (CFA), and a Certified Cost Professional (CCP). He can be reached at rickkellsworth@gmail.com.