Methodologies of FinTech Valuation
Relief from royalty method
This method positioned as a simple method which considers practical application aspects. This method focuses on the cost that could save by owning the royalty instead of leasing it. This valuation method is common to value patents, utility models and trademarks.
Multi-period excess earnings method
This model estimates the free cash flow derived from the intangible asset and then was deducted by the value of supporting assets, such as fixed assets and working capital. The result can be viewed as the value solely contributed by the subject intangible asset.
Incremental Cash Flow method
This method measures the economic benefit provided by the subject asset. An intangible asset is valued based upon the additional profit or cost savings that the owner of the intangible asset will achieve in relation to if they did not own the intangible asset.