CVA Valuation of Intangible Assets Flashcards
6 cards from real Certified Valuation Analyst practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CVA Valuation of Intangible Assets flashcards as text
Under ASC 350, goodwill is subject to:
Answer: Annual impairment testing rather than systematic amortization
Under GAAP, goodwill is not amortized but must be tested for impairment at least annually at the reporting unit level.
The With-and-Without Method for valuing intangibles estimates value by:
Answer: Comparing business value with the intangible in place versus without it
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.
When valuing assembled workforce under a purchase price allocation, analysts typically use:
Answer: The Cost Approach, estimating replacement hiring, training, and ramp-up costs
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.
Which of the following best describes 'enterprise goodwill' versus 'personal goodwill' in a business valuation?
Answer: Enterprise goodwill is transferable with the business; personal goodwill attaches to a specific individual and is not
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.
In the Relief from Royalty method, the royalty rate applied to revenues is typically derived from:
Answer: Comparable licensing agreements or royalty rate databases
Royalty rates are benchmarked against arms-length licensing transactions for comparable intangibles, sourced from databases like RoyaltyStat or ktMINE.
Technology intangibles (developed technology) are most commonly valued using:
Answer: The Relief from Royalty method or MPEEM, depending on whether it is the primary value driver
Developed technology is valued using Relief from Royalty when comparable licensing rates exist, or MPEEM when it is the primary intangible generating excess earnings.
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