DEFINITION of 'Calculated Intangible Value  CIV'
A method of valuing a company's intangible assets. This calculation attempts to allocate a fixed value to intangible assets that does not change according to the company's market value. Examples of intangible assets include brand equity and proprietary technology.
BREAKING DOWN 'Calculated Intangible Value  CIV'
Usually a company's intangible assets are valued by subtracting a firm's book value from its market value. However, opponents of this method argue that because market value constantly changes, the value of intangible assets changes also, making it an inferior measure. Finding a company's CIV involves seven steps:
1. Calculate the average pretax earnings for the past three years.
2. Calculate the average yearend tangible assets for the past three years.
3. Calculate the company's return on assets (ROA).
4. Calculate the industry average ROA for the same threeyear period as in Step 2.
5. Calculate excess ROA by multiplying the industry average ROA by the average tangible assets calculated in Step 2. Subtract the excess return from the pretax earnings from Step 1.
6. Calculate the threeyear average corporate tax rate and multiply by the excess return. Deduct the result from the excess return.
7. Calculate the net present value of the aftertax excess return. Use the company's cost of capital as a discount rate.

Market Value
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The value premium that a company realizes from a product with ... 
Tangible Asset
Assets that have a physical form. Tangible assets include both ...

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