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Article: Computer software valuation: don't be led astray by a quick approach. (Debits & Credits)
- Article from:
- The National Public Accountant
- Article date:
- September 1, 1992
- Author:
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Copyright informationCOPYRIGHT 1992 National Society of Public Accountants. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Computer software is a valuable business tool for your client, and for many different reasons for. It can be held as nontypical loan collateral, enhance the purchase price in buy-sell negotiations and be used to transfer wealth intergenerationally. Frequently, unsophisticated analysts apply broad brush formulas or rules of thumb to the valuation of computer software. These quick approaches can lead to misleading results as to the relative value of what can be an important intangible asset to a business enterprise. Therefore, a current, accurate determination of the value of a company's computer software is often critical to the firm's current owners, potential buyers, ...