Finance of the Intangible Assets
An economic resource that can hold any form of importance to an individual, organization or state can be considered as an asset. These assets can be both tangible and intangible. Intangible Asset management and finance can be quite tricky. Just like other forms of finance, the finances of the Intangible Assets also deal with interdependent factors of risk, value and time. However, since the asset in question is intangible, therefore the measurement of the quality is the main challenge to manage the finance of these intangible assets.
The basic factors that constitute the finance of the intangible assets include the patent and the reputation. While patent deals with the legalities related with the asset, reputation is involved in the competitive market of the asset. There are various business models associated with the finance of the intangible assets:
• Enforcement Companies and Patent Licensing: The firms, which specially deal with securing licenses along with damages awards from those of the infringing parties
• Royalty stream securities: The firms specialize in the buy and sell of securities, which are backed by assets. The assets include patents, royalties, etc.
• Reinsurers: The firms use reinsurance as techniques so that the risks associated with intangible assets are mitigated.
• Market makers: The firms strive towards provisioning more liquidity towards the market for the available intellectual property.
• Firms on Investment Research: The consulting firms aid the client with information on the best investment options on intellectual properties.
The main aim of such kind of finance is to qualify the hidden value of the intangible assets.