Certified Valuation Analyst CVA Valuation of Intangible Assets 2

Question 1

Under ASC 350, goodwill is subject to:

Accepted Answer

Annual impairment testing rather than systematic amortization

Answer

Under GAAP, goodwill is not amortized but must be tested for impairment at least annually at the reporting unit level.

Question 2

The With-and-Without Method for valuing intangibles estimates value by:

Accepted Answer

Comparing business value with the intangible in place versus without it

Answer

The With-and-Without Method values the intangible as the difference between two DCF scenarios — one assuming the intangible exists and one assuming it must be replaced or foregone.

Question 3

When valuing assembled workforce under a purchase price allocation, analysts typically use:

Accepted Answer

The Cost Approach, estimating replacement hiring, training, and ramp-up costs

Answer

Assembled workforce is a contributory asset valued using the Cost Approach because it reflects what it would cost to recreate the trained workforce from scratch.

Question 4

Which of the following best describes 'enterprise goodwill' versus 'personal goodwill' in a business valuation?

Accepted Answer

Enterprise goodwill is transferable with the business; personal goodwill attaches to a specific individual and is not

Answer

Enterprise goodwill transfers to a buyer along with the business, while personal goodwill is tied to a key person and does not survive a change in ownership.

Question 5

In the Relief from Royalty method, the royalty rate applied to revenues is typically derived from:

Accepted Answer

Comparable licensing agreements or royalty rate databases

Answer

Royalty rates are benchmarked against arms-length licensing transactions for comparable intangibles, sourced from databases like RoyaltyStat or ktMINE.

Certified Valuation Analyst Practice Test

Certified Valuation Analyst Practice Test

Certified Valuation Analyst CVA Valuation of Intangible Assets 2