## Calculated Intangible Value (CIV)

### Calculated Intangible Value (CIV)

### What is 'Calculated Intangible Value - CIV'

A method of valuing a company's intangible assets. This calculation attempts to allocate a fixed value to intangible assets that does not change according to the company's market value. Examples of intangible assets include brand equity and proprietary technology.

### Explaining 'Calculated Intangible Value - CIV'

Usually a company's intangible assets are valued by subtracting a firm's book value from its market value. However, opponents of this method argue that because market value constantly changes, the value of intangible assets changes also, making it an inferior measure. Finding a company's CIV involves seven steps:

1. Calculate the average pretax earnings for the past three years.

2. Calculate the average year-end tangible assets for the past three years.

3. Calculate the company's return on assets (ROA).

4. Calculate the industry average ROA for the same three-year period as in Step 2.

5. Calculate excess ROA by multiplying the industry average ROA by the average tangible assets calculated in Step 2. Subtract the excess return from the pretax earnings from Step 1.

6. Calculate the three-year average corporate tax rate and multiply by the excess return. Deduct the result from the excess return.

7. Calculate the net present value of the after-tax excess return. Use the company's cost of capital as a discount rate.

### Calculated Intangible Value (civ) FAQ

#### Can you sell intangible assets?

#### What does intangible value mean?

#### What is the most common valuation method used for intangible assets?

#### How do you value intangible assets on a balance sheet?

#### How do you find intangible assets?

#### What are the difficulties in valuation of intangible assets?

### Further Reading

**Measurement and management of intellectual capital**

hrcak.srce.hr [PDF]

… This is done by calculating the three-year average corporate tax rate and then subtracting this … 7. Calculate the net present value of the after-tax excess return … Aho, S., Ståhle, P. and Ståhle, S. (2011a), “Critical analyse of the Calculated Intangible Value (CIV) method”, paper …

**Intellectual Capital and the Creation of Value in Brazilan Companies**

papers.ssrn.com [PDF]

… This is done by calculating the three-year average corporate tax rate and then subtracting this … 7. Calculate the net present value of the after-tax excess return … Aho, S., Ståhle, P. and Ståhle, S. (2011a), “Critical analyse of the Calculated Intangible Value (CIV) method”, paper …

**Intangibles and performance in oil and gas industry**

www.emerald.com [PDF]

… This is done by calculating the three-year average corporate tax rate and then subtracting this … 7. Calculate the net present value of the after-tax excess return … Aho, S., Ståhle, P. and Ståhle, S. (2011a), “Critical analyse of the Calculated Intangible Value (CIV) method”, paper …

**A critical assessment of Stewart's CIV method**

www.emerald.com [PDF]

… This is done by calculating the three-year average corporate tax rate and then subtracting this … 7. Calculate the net present value of the after-tax excess return … Aho, S., Ståhle, P. and Ståhle, S. (2011a), “Critical analyse of the Calculated Intangible Value (CIV) method”, paper …

**Relationship between intellectual capital with productivity and market value added in Tehran Stock Exchange**

www.inderscienceonline.com [PDF]

… This is done by calculating the three-year average corporate tax rate and then subtracting this … 7. Calculate the net present value of the after-tax excess return … Aho, S., Ståhle, P. and Ståhle, S. (2011a), “Critical analyse of the Calculated Intangible Value (CIV) method”, paper …