Research On The Valuation Of Intangible Assets Based On Real Options

Intangible assets has been assuming greater function and values in era of rapiddevelopment of society. Intangible assets evaluation can apply in many economicactivities，especially where trading of ownership of intangible assets occurs. It isimportant that the evaluation is correct which serves to uphold the rights of bothparties. In view of this, it is imperative that we have reasonable and scientificevaluation of intangible assets.Traditional methods can depreciate the actual value of intangible assets becauseof neglecting of the flexibility under uncertainties. As a new method of valueevaluation, real options method takes full consideration of operation adaptability andmanagement flexibility, which enables real options method a necessary way ofintangible assets evaluation.Based on the understanding of real options and traditional intangible assetsevaluation method, the characteristics of real options are analyzed, which fits into thecharacteristics of option object asset. The B-S model and binary model are used in theevaluation of intangible asset and real option pricing model and identification of itsparameters are formed accordingly. The last part is about the application of realoptions. Three cases are analyzed and compared between the value of intangible assets with orwithout the application of real options method. Traditional methods always ignore the valueof the uncertainty, just think of it as the disadvantage factors, which leads to the valueof the intangible assets be underestimated. But the real options method can accuratelycalculate the value of intangible assets under the uncertain condition, which makingup for the defect of the tradition method.