Intangible assets valuation methodologies Assignment

Intangible assets valuation methodologies - Assignment Example Cost based valuation approach is to measure the future benefit from the ownership of the tangible asset. The valuation of intangible assets is affected by the cost of substitute intangible asset. The cost based valuation approach also includes the new reproduction cost of the asset after deducting the tax. The cost approach measures the total cost of the duplicate intangible asset of same functionality in current prices. Functionality of the intangible asset is the performance of the job for which it was introduced. According to the cost based valuation approach of intangible assets include direct cost, indirect cost, the developer’s profit of the intangible asset and opportunity cost. The direct and indirect cost of intangible assets are easily identified and quantified while developer’s profit is comparatively difficult as it can be calculated through different procedures. All the four types of costs including direct, indirect, developer’s profit and opportunity cost are included in the valuation of intangible asset through cost based approach. The valuation should also include the physical deterioration, functional and economic obsolesce. The depreciation on the intangible asset is subtracted from the current value. Market based valuation approach is the perception of the economic value of the intangible asset. This valuation approach is based on supply and demand and market efficiency. The value of an intangible asset can valued from the sale or transfer of the asset with same features in the same market. This approach is more suitable for active assets so that several examples can be found for the valuation of the asset. Market based valuation is more logical, practical and applicable on intangible assets. The most reliable fair value is the quoted market price of the intangible asset in the active market. The first step in valuation through market approach is collection of data from

Capabilities and Resources of LinkedIn Case Study

Capabilities and Resources of LinkedIn - Case Study Example The company has grown tremendously. As at 2011 December, the revenues had reached $522, 189 with the number of employees also increasing to 2,116 employees. It has also been able to establish its headquarters in Mountain View, California, and 14 other regional offices. Â  The social media industry is ripe and there are many opportunities for LinkedIn. The Asian market remains not fully exploited. In addition, there are other social networking platforms that the company can use to expand its operations and hence profitability. The company should stick to its focus on professionals in order to occupy its market niche. Despite these, various issues that confront the company. Firstly, there is high competition; Facebook, Twitter, Google+, and Xing provide a big competition that has kept the stake of the company on medium in the social media industry. Secondly, the number of unique visitors is relatively low. Thirdly, the site has limited strategy of getting new subscribers; it usually occurs through referrals. Finally, the amount of time that is spent on the site is relatively lower. Â  LinkedIn is one of the major social networking sites in the world today. The site was started in December 2002. He was joined hands by his forms colleagues at PayPal, Stanford University, and Socialnet.com. The company has been growing since then courtesy of a number of facilitators such as technology, management, and the socio-economic environment. Reid Hoffman who is the president of the company founded the company; he was initially the chief executive officer (CEO) before the company hired its first CEO, Dan Nye in 2007. Nye resigned in December 2008 making Hoffman reassume the role of a CEO.