In his article “Intangible Asset Valuation for Tax Purposes Under Fair Market Value and Arm’s-Length Standards,” Tom Gottfried, Managing Director of VRC’s National Tax Valuation Practice, discusses the complexities of valuing intangible assets for tax purposes. The article, featured by Tax Executive, the professional journal of Tax Executives Institute, delves into the differences between fair market value (FMV) and arm’s-length standard (ALS) approaches, essential for transactions like mergers, acquisitions, and business reorganizations.

Gottfried emphasizes the necessity of aligning the valuation standard with the specific tax requirements of each transaction, as discrepancies between standards can lead to significant differences in asset valuation. He provides detailed insights into methodologies such as the income approach, market approach, and cost or asset approach, highlighting the intricacies involved in each. Additionally, Gottfried explores method-specific considerations under both FMV and ALS standards, offering practical guidance for professionals navigating intangible asset valuation in a complex tax landscape.