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shrox
04-01-2015, 07:28 PM
Some questions about our stuff.

What are digital assets worth? How does one determine their worth? Are they something one can declare as having a cash value? Can they be collateral for a loan? Can they be insured?

sukardi
04-01-2015, 07:42 PM
The best measure is by the cash flow they brought or expected to bring in. For example if you license an asset and it brings $100 a year, its value can be argued to be a multiple of that. Without cash flow, it is really hard for accountants to value it ...

shrox
04-01-2015, 07:45 PM
The best measure is by the cash flow they brought or expected to bring in. For example if you license an asset and it brings $100 a year, its value can be argued to be a multiple of that. Without cash flow, it is really hard for accountants to value it ...

Say you have assets that were used in a popular game, book, TV show, movie, etc. Something that is likely to have been seen outside of institutional or corporate use. And let's assume that you do "own" it.

sukardi
04-01-2015, 07:59 PM
Say you have assets that were used in a popular game, book, TV show, movie, etc. Something that is likely to have been seen outside of institutional or corporate use. And let's assume that you do "own" it.

Yes, that would be VERY hard to value unless the sum involved is substantial...

Davewriter
04-01-2015, 08:11 PM
I could foresee a most interesting conversation with the bank's loan officer.
"Well... I don't really have a Pink Slip for it... or a deed. But it's right here on my hard drive and..."

shrox
04-01-2015, 08:22 PM
I could foresee a most interesting conversation with the bank's loan officer.
"Well... I don't really have a Pink Slip for it... or a deed. But it's right here on my hard drive and..."

That's exactly what I am wondering about!

roboman
04-01-2015, 08:34 PM
My guess is that the value of a digital asset is the same as any other asset. My day job is building machinery that costs any where from a few thousand to a few million dollars. I've been approached a number of times, when a product or business failed, and they wanted to sell the machinery. Unless it comes with purchase orders for the parts it makes, or knowledge of who else would want to make that product, it's worth the scrap metal price and the price the off the shelf parts can get on e-bay. The $120,000 tool may only be worth $120 at that point, minus the cost to truck it to the scrap dealer. So my guess is the asset is worth what ever some one else is willing to pay for it, same as any asset, but probably has no real scrap value :)

jwiede
04-02-2015, 03:41 AM
That's exactly what I am wondering about!

Actually, depending on the context, banks and insurers are beginning to understand IP intrinsic value. You just need a bank/insurer/whatever who's progressive and does, and then need to discuss the matter with the relevant officer/representative. The "multiple of cash flow" method is a fairly universal business standard, but for "recognizable" (and properly RM/TM rights*) IP, depending on the recognition value of the identity, they will often be able to come up with some assessment of value.

*: Owning the asset, and owning the rights to use the visual likeness aren't automatically the same thing with RM/TM'ed content.