Valuation of Professional Licenses and Other Individual Intangible Assets
As individuals, many practitioners need to hold licenses in order to provide their professional services, including practitioners of law, medicine, accountancy, and many other professions. In addition to government-issued professional licenses, these professional practitioners may also own and operate other individual intangible assets, including client relationships, services names and service marks, affiliation and other agreements, and many others. As entities, professional practices and professional services companies typically own and operate practice licenses and other intangible assets. Such other intangible assets may include client relationships and contracts, client and other files and records, an assembled workforce, employment and noncompete agreements, trademarks and trade names, and various permits and contracts. Valuation specialists are often asked to value these practitioner or entity licenses and other intangible assets for various regulatory, accounting, taxation, transaction, financing, litigation, or other reasons. This discussion describes many of those reasons. This discussion summarizes the relevant generally accepted valuation approaches, methods, and procedures. And, this discussion illustrates the application of those generally accepted valuation approaches and methods through several simplified illustrative examples.