The following is not meant to be legal advice.
What if there are disputes on options? Options base valuation on the volatility of the asset. Investment value is higher than the fair value. It is what the buyer would consider. Fair value is what is in the financial statements. Different valuation methods may be used depending on the purpose, and whether the goal is for numbers to turn out high or low. Once chosen, there needs to be consistency so that over time, there is an explanation on what happened and disclosure to use as a defense in litigation to show that the market knew the stock price reflected the judgment.
Market based valuation is leaning on the market for valuating. For example, looking at other companies in an industry. Usually it is applied for the entire business. Market is assigning value to similar performers. It is difficult to use market based valuation for intellectual property valuation. A patent, for instance, does not give a right to do anything. It gives someone the right to prevent others from doing something. Valuating specific patents is rare. Usually, a person values a portfolio. Whatever valuation to use would be less than the amount of damages requested in an intellectual property lawsuit.
Compare market based valuation to income based valuation which is more specific.
Comment Preview