What is Trade Secret Valuation?
The valuation of trade secrets is a critical step in realising their true value to the company. Trade secret assets are financial assets, the value of trade secret assets must be reported and internal controls must be established and maintained to ensure the accuracy of the company’s financial reports. Trade secrecy plays a key role in a variety of innovation environments, including market conditions where technology evolves quickly, where inventions may (and do) occur simultaneously, where innovations occur in a cumulative manner, where combinations of trade secrets, patents, and other forms of intellectual property are embedded in “complex” products, or in circumstances where patent rights are considered weak. With specific focus on small and medium-sized enterprises (SMEs), trade secrets appear of particular importance because innovation in this segment tends to be more incremental in nature and of core significance to firm value and performance..The valuation of a trade secret asset is a function of both the content of the trade secret information and protection of the trade secret asset.
Why Trade secret valuation is necessary?
* Cost Savings – Enable operating cost savings that result in increased operating margins
* Risk Reduction – Enable certain reduction in the risk that the owner would have to incur to generate cash flows
* Time Acceleration – The cash flows generated from the utilization of the trade secrets come faster to the owner than if they were not in this advantageous position
* Revenue Generation/Preservation – Act as barriers to entry, which enables the owner to extract premium profits through commercial sale of product and/or service
Why choose ITAG Business Solutions for Trade secret Valuation?
* We take into consideration that trade secret protection is key in maximizing value.
* We make reasonable efforts to maintain your trade secrecy
* We research the length of time it took to originate the trade secret and how this impacts the overall product or service value
* We determine the impact of competitors on the useful life of your trade secret