Valuation of intellectual property — Income approach and scenario analysis: Software on early stage of implementation

The development of sophisticated software products is often related to high uncertainty of the effect. One of the important tasks of decision makers is proper assessment of the future financial value of the effect. A proper method for calculating the value of intellectual property is a crucial topic to make the proper decision. Selected problems related to valuation and defining of intellectual property were described. Authors have developed a model of business valuation software on early stage of development. Article describes advantages and disadvantages of common method and shows a case study of the valuation of intellectual property. Proposed model is based on scenario analysis. Paper presents how to adjust common method of valuation for valuation of intellectual property related to software in case of lack of market comparisons.