 Relief from RoyaltyMarc C. Hübscher () and
Stella Ehrhart
A chapter in Intangibles in the World of Transfer Pricing, 2021, pp 283-298 from Springer Abstract: Abstract The relief-from-royalty approach is based on the idea that the fair value of an intangible asset equals the present value of the cost savings realized by the owner of the asset that result from not having to pay royalties for the use of the intangible asset to another party. In order to determine the cost savings, a hypothetical royalty rate has to be calculated for the subject asset, based on market comparable royalty rates. As it is less complex and highly transparent in terms of calculation and input parameters the relief-from-royalty approach is a valuation method that is commonly used in practice for the fair value assessment of brands and trademarks, patents, software, and databases. However, since it is largely dependent on market comparable royalty rates, it is essential to apply detailed plausibility and reconciliation considerations in order to derive reliable fair value results. Keywords: Royalty payments; Market comparable royalty rates; License agreements; Reference value; Profit split; Knoppe formula; 25 percent rule; Return on asset (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-319-73332-6_16 Ordering information: This item can be ordered from DOI: 10.1007/978-3-319-73332-6_16 Access Statistics for this chapter More chapters in Springer Books from Springer |
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