SDG 9: Industry, Innovation and Infrastructure | SDG 17: Partnerships for the Goals
Institutions: Ministry of Commerce & Industry
As global economies shift from industrial production to being intangible-driven, the World Intellectual Property Organization (WIPO) is promoting practices to improve the valuation of non-physical assets. WIPO recently submitted high-level recommendations on proposed Intangible Asset Valuation Guidelines, developed in collaboration with key global valuation organizations. The initiative is designed to ensure valuation practices are credible, consistent, and transparent for stakeholders like investors and innovators. WIPO’s guidance aims to go beyond technicalities, ensuring clarity on identifying asset types, valuation inputs (like hypothetical royalty rates), and performing crucial analyses such as sensitivity testing. This effort strengthens the foundation for effective intangible asset valuation worldwide, which is critical for innovative enterprises to secure greater access to capital and funding.
Intangible Asset Valuation Guidelines are proposed best practice guidelines, jointly developed by organizations including IVAS, ASA, CBV Institute, and RICS. They are intended to supplement existing International Valuation Standards (IVS) by offering practical guidance on complex areas like identifying assets, assessing risk factors, and performing advanced analyses for non-physical assets. WIPO’s response to the public consultation on these guidelines and the link to the proposed Guide are intended to inform the public and ensure transparency in valuation practices.
The push for consistent global standards in intangible asset valuation is vital for India’s startup ecosystem and national innovation strategy, as clear IP valuation is necessary to unlock foreign investment, facilitate licensing agreements, and enable deep-tech companies to use their intellectual property as collateral for debt financing.
What are Intangible Assets? → Intangible assets are non-physical resources or rights owned by a company that have economic value but do not have a material presence, distinguishing them from physical assets like buildings or machinery. These assets include intellectual property (IP) like patents, trademarks, and copyrights, as well as non-IP assets like brand reputation, proprietary data, algorithms, customer relationships, and technology blueprints.
What is the World Intellectual Property Organization (WIPO)? → The World Intellectual Property Organization (WIPO) is a specialized agency of the United Nations (UN), established in 1967 and headquartered in Geneva, Switzerland. WIPO is the global forum for intellectual property (IP) policy, services, information, and cooperation. Its mandate is to promote the protection of Intellectual Property (IP), such as patents, trademarks, and copyrights, and to encourage creative activity and innovation worldwide. WIPO administers over 26 international treaties and runs major services like the Patent Cooperation Treaty (PCT) and the Madrid System for international patent and trademark filing.
Relevant Question for Policy Stakeholders: What framework should Indian regulators establish to align domestic IP valuation standards with international best practices to catalyze venture and debt financing for deep-tech startups?
Follow the full news here: WIPO Continues Promoting Best Practices in Intangible Asset Valuation
Best Practices in Intangible Asset Valuation