Question

Explain how you would value a patent under the following situations, a patent with no current application, a patent linked to an existing product and a patent portfolio?

Answer 1

Patents comes under the head intangible assets which are discussed under the accounting standard @ accounting for intangible assets

It is discussed under the AS that any intangible asset which is of no use at Present should be fully amortised in the current year so in the first case it should be fully amortised

2. Patent linked to a present product is of high value it mean that we are the only ones to make the product a final good so it is of high value the value of the patent can be derived from the goods sold on the basis of production made using the patent.  

3. And a patent in a portfolio should be amortised according to the company amortisation policy

**amortisation is the word used for intangible assets In case of depreciation of tangible assets