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As stated above, valuation of IP assets is crucial for M&As as well. The
famous example of Japan Tobacco Inc. taking over the tobacco business
of Akij Group, the single largest foreign direct investment in Bangladesh,
shows that out of the value of the entire acquisition (i.e. USD$ 1.47
billion), consideration for acquisition of trademarks and design rights
reportedly amounted to USD$ 386 million.

For the valuation of IP assets of a business, it is crucial that the following
conditions are met: (i) the asset must be separately identifiable; (ii) the
asset should have a tangible evidence of its existence (e.g. agreement,
license, document of registration, any record of financial statement); (iii)
the asset should be capable of being enforced or transferred legally; (iv)
the stream of income coming from the asset must be clearly identifiable
from income from other business assets; (v) it must be able to be sold
separately from other assets of the business; and (vi) it should be subject
to termination or destruction at the concerned moment in time. 3

3 https://www.wipo.int/sme/en/value_ip_assets/

Valuation of IP | 33