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Intangible Asset; Purchase Price

EAC completed an intangible asset appraisal to assist in the allocation of a purchase price. The requesting client was a large hospital (buyer) looking to establish a purchase price between fixed and intangible assets of a medical practice (seller) generating over $4.5MM in sales per year. EAC established values for three separate intangible assets to assist the requesting parties.

‣ Industry: Healthcare
‣ Standard of Value: Fair Value

What is an Intangible Asset?

An asset that is not physical in nature. Corporate intellectual property (items such as patents, trademarks, copyrights, business methodologies), goodwill and brand recognition are all common intangible assets in today’s marketplace. An intangible asset can be classified as either indefinite or definite depending on the specifics of that asset. A company brand name is considered to be an indefinite asset, as it stays with the company as long as the company continues operations. However, if a company enters a legal agreement to operate under another company’s patent, with no plans of extending the agreement, it would have a limited life and would be classified as a definite asset.