IVS 210: Valuing Intangible Assets in Family Law Business Valuations
- DB Forensic
- Mar 18
- 3 min read
Updated: Apr 15
When a business is involved in a family law property settlement, most people naturally think about physical assets such as property, equipment, or cash. However, some of the most valuable assets in a business cannot be seen or touched.
These are known as intangible assets. They include things such as brands, customer relationships, software, intellectual property, and goodwill.
In many businesses, these intangible assets represent a significant portion of the overall value. If they are overlooked or misunderstood, the valuation of the business may be incomplete or inaccurate.
International Valuation Standard IVS 210: Intangible Assets provides guidance on how these assets should be identified and valued. Understanding this standard helps ensure that the financial position of a business is properly assessed during family law disputes.
What Are Intangible Assets?
An intangible asset is a non-physical asset that generates economic benefits for its owner. Unlike equipment or real estate, intangible assets do not have physical substance but still contribute to a business’s ability to generate income.
Examples of intangible assets commonly found in businesses include:
Marketing-related assets such as trademarks, brand names, and internet domain names
Customer-related assets such as customer contracts, client databases, and long-term relationships
Technology-related assets including patents, proprietary software, formulas, and designs
Contract-based assets such as licences, supply agreements, or franchise rights
Artistic assets such as copyrights for books, films, or music
In addition to these identifiable assets, businesses may also have goodwill, which represents the future economic benefit that arises from the reputation, brand strength, customer loyalty, and overall position of the business in the market.
For many professional practices, online businesses, technology companies, and service-based firms, these intangible assets can represent the majority of the business’s value.
Why Intangible Assets Matter in Family Law
During a property settlement, the Family Court must determine the true value of the business interests held by the parties.
If intangible assets are not properly identified, the valuation may underestimate the actual worth of the business. For example:
A medical practice may derive significant value from its patient relationships
A technology company may rely on proprietary software or intellectual property
An online business may have strong brand recognition and customer data
A franchise business may benefit from valuable licensing agreements
IVS 210 highlights that the definition of the intangible asset being valued can significantly impact the outcome of the valuation. For instance, customer data, existing contracts, and ongoing customer relationships may each carry different values depending on how they are defined and analysed.
This is why careful identification and classification of intangible assets is critical in forensic valuations.
How Intangible Assets Are Valued
IVS 210 outlines several valuation approaches that can be used when assessing intangible assets.
Income Approach
The income approach estimates value based on the future economic benefits generated by the intangible asset. These future cash flows are then discounted back to present value.
This approach is commonly used for assets such as:
technology and intellectual property
brands and trademarks
customer contracts or relationships
operating licences and franchise rights
Several recognised methods fall under the income approach, including the relief-from-royalty method, excess earnings method, and with-and-without method.
Market Approach
The market approach compares the asset with similar intangible assets that have been sold or licensed in the market.
However, comparable transactions are often limited, which means this approach is not always available for every asset.
Cost Approach
The cost approach considers what it would cost to recreate or replace the intangible asset.
This method may be appropriate for assets such as internally developed software or databases where development costs can be estimated.
The Role of Forensic Accounting in Intangible Asset Valuations
Valuing intangible assets requires specialised expertise. These assets are often complex, difficult to measure, and closely linked to the overall performance of the business.
Forensic accountants assist family lawyers and clients by:
identifying all intangible assets associated with a business
distinguishing between transferable goodwill and personal goodwill
selecting appropriate valuation methods under IVS standards
analysing financial data to isolate the economic benefits attributable to specific assets
preparing independent expert reports suitable for court proceedings
At DB Forensic, our forensic accountants regularly perform business valuations for family law matters. We apply recognised valuation standards, including IVS 210, to ensure that intangible assets are properly considered when determining the value of a business.
This helps the Court, lawyers, and parties reach fair and evidence-based financial outcomes.
Need Clarity on Intangible Asset Valuation?
Intangible assets are often the hidden drivers of business value. When a business is involved in a family law dispute, properly identifying and valuing these assets can significantly impact the final property settlement.
Professional forensic accounting advice can help clarify complex financial structures, identify hidden value, and ensure the valuation evidence presented to the Court is robust and reliable.
If you need assistance with a business valuation or forensic accounting analysis, the team at DB Forensic can help.
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