Intangible value and risks: regulation requirements, valuation practices and ways forward – a better risk awareness within valuation reports

Véronique Blum

Chapter 22 in Handbook on Intangibles, 2026, pp 396-441 from Edward Elgar Publishing

Abstract: Intangible assets, due to their lack of physical form, are difficult to observe and measure, often resulting in uncertainty and perceived risk. Translators, such as the discrepancy between book and market value, are commonly used to infer the presence and value contribution of intangibles, though this method has significant limitations. A major issue is the lack of consensus on what constitutes an intangible asset, with varying definitions across accounting and valuation standards. Additionally, identifying which specific intangible assets account for the value gap is challenging, as many different elements – such as brands, patents, and data – may be involved. The volatility and risk of intangibles further complicate their valuation, especially since many valuation models overlook formal risk assessment. The development of risk literacy is crucial, as it enables professionals to make better decisions and enhances the credibility of their valuation work. Misjudgments often arise from cognitive biases or flawed generalizations, leading to inaccurate financial decisions. Capturing risks within valuation models remains insufficiently addressed, with current methodologies often ignoring or underestimating future uncertainties. Representing risks accurately – whether quantitatively or narratively – is another major challenge, with no consensus on best practices between point and range analyses. This chapter calls for the integration of theoretical insights, improved risk modeling, and the inclusion of forward-looking information to enhance the reliability and relevance of intangible asset valuation.

Keywords: Intangibles; Risks; Valuation (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035306367
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