Price appraisal for intangible assets in Vietnam

In recent years, there have been a number of Vietnamese brands sold to foreign investors at prices much higher than their total tangible assets such as: ICP (60 million USD) or Diana (184 million USD), P / S (5 million USD), Pho 24 (20 million USD)… This shows that intangible value has been gradually recognized when valuing the enterprise. Despite the high intangible asset value, in Vietnam, it is hardly reflected in the accounting books.

Circular No. 06/2014 / TT-BTC of the Ministry of Finance on Valuation Standards No. 13 has clearly defined how intangible asset valuation in Vietnam is similar to world standards, but in reality In fact, valuation of intangible assets in Vietnam is relatively new and facing many difficulties.

Intangible property concept

According to the valuation standard No. 13 issued together with Circular No. 06/2014 / TT-BTC dated January 7, 2014 of the Ministry of Finance, intangible assets are assets without physical form and is capable of creating economic rights and interests.

International valuation standards (IVS 2013) define: intangible assets is a non-monetary asset, manifesting itself through their economic characteristics. Intangible assets has no physical form but brings economic rights and benefits to its owners. Intangible assets includes the identifiable and the unrecognizable

International Accounting Standard No. 38 (IAS 38) introduces the concept: Intangible assets is a recognizable non-monetary asset and has no physical form. In which, Intangible assets can be identified if it can be separated from the entity, or the Intangible assets arises from the contractual right or other rights under the law.

Classification of intangible assets according to Vietnam Valuation Standards

Intangible assets according to Vietnams valuation standards include: Intellectual property; Intellectual property rights in accordance with the law on intellectual property (for example: copyright, industrial property rights ...); Rights to bring economic benefits to parties specified in civil contracts in accordance with law (for example, mining rights, trading rights, transferable emission rights) ; Non-contractual relationships that provide economic benefits to parties, relationships with customers, suppliers or other entities (e.g. customer lists, databases); Other Intangible assets

The role of intangible assets in the business development

Intangible assets contributes to building corporate image (DN), attracting the trust of customers, improving productivity, product quality, and market expansion services of enterprises. Therefore, Intangible assets enhances the competitiveness of enterprises.
Investments in intangible resources in developing and developed countries are more likely to dominate investments in tangible resources. This shows that Intangible assets is an important resource in modern production and business as well as attracting investments from abroad.

The purpose and role of intangible asset valuation

Intangible asset valuation purpose

- Allows enterprises to more accurately determine the value of the enterprise
- Serve the correct determination of the costs associated with the depreciation of intangible fixed assets, thereby calculating the cost better.
- Helps facilitate the trading and exchange of assets between enterprises, helping businesses facilitate the formation of projects, develop their own assets.

Intangible assets price appraisal in case: sale, purchase, transfer; joint ventures; enterprise restructuring: (purchase, sale, merger, split, equitization ...) debt settlement; dissolve enterprises; compensation, insurance, claims; accounting plan, tax calculation..

The role of intangible asset valuation

In the sale, purchase, transfer of assets, valuation of assets has an important role in determining the price for the parties to negotiate. The assessed value of Intangible assets can be the maximum price that the buyer should pay or the reasonable price offered by the seller to negotiate. Intangible assets accounts for a large proportion in the total value of enterprises, so when buying, selling or merging enterprises, the valuation of assets as a basis for negotiation and transaction is very important.