Tax Valuation

Tax valuation is a key offering of Economics Partners at Ryan. Distinctly, we believe that we take a more thorough and holistic approach to tax valuation matters than a typical accounting or valuation firm might.

We have deep experience and provide extensive thought leadership in the field of tax-related valuation. Our services include tax-restructuring related legal entity valuation and post-acquisition valuation of legal entities and intangible assets for 1060A, post-acquisition buy-ins, and/or general IP migration purposes.

If you are looking for business valuation and advisory services, as it pertains to mergers, acquisitions, dispositions, and corporate activities,  please visit Ryan Business Valuation.

Tax Valuation

Intangible Asset Cost of Capital Models

We have developed unique techniques for determining the cost of capital associated with nonroutine intangible asset accounting. While it has long been asserted that intangible assets are “more risky” than physical assets, for the most part the valuation field did not have an analytical methodology for determining how much more systematic risk intangible assets carried. Our techniques for determining this are described in our textbook and white papers.
Tax Valuation

Licensor and Licensee Cost of Capital Markets

In a very similar manner, we have developed proprietary techniques for determining the cost of capital for licensors and licensees. These techniques are also described in our textbook and white papers. In addition to well over 250 engagements involving the valuation of all types of intangible assets for transfer pricing purposes, our economists have also valued intangibles for third-party joint venture negotiations and for IP damages claims.
Tax Valuation

Legal Entity Valuation

It is not well understood that there is a close relationship between legal entity valuation for tax purposes and transfer pricing theory and regulation. Not only do intercompany transactions directly affect the equity and enterprise values of the legal entities within a multinational corporation by affecting taxable income, but important transfer pricing concepts come into play when examining the value of a legal entity for tax purposes.

Advising the World’s Biggest Economic Movers

We have performed valuation analyses in support of global restructurings undertaken by several clients, which necessitated the derivation of the fair market value of shares for the vast majority of their non-U.S.-based legal entities. For each of these engagements, we valued hundreds of legal entities with combined net worths in excess of billions of dollars in an efficient and reliable manner. Our clients were supported through interrogations regarding the valuations from auditors to tax authorities.

Tax Valuation

Case Study: Consumer Packaged Goods

A multinational consumer products client had a need to address their most grating transfer pricing issue, related to the license of its product IP to foreign affiliate. Economics Partners at Ryan first conducted a feasibility analysis and later formalized a buy-in transaction to execute a cost sharing agreement between the U.S. and foreign affiliates. We obtained an advance pricing agreement on the value of the buy-in and mechanics of the cost sharing agreement to eliminate future risk.

Thought Leadership and Expertise

1Publications
  • “Defending Valuations for Equity Transfers of Chinese Enterprises,” CRA Insights, September 2011, by Perry Urken with Peter Chen
  • “Valuation of IP in the UK in the 21st Century,” International Tax Review, Intellectual Property (4th Edition), Number 24, pp.42–45, by Perry Urken with Ted Keen
  • “Estimating Discount Rates – An Alternative to the CAPM,” Valuation Strategies, March/April 2005, by Perry Urken
  • “Does a Small Firm Effect Exist when Using the CAPM? Not Since 1980 and Not when Using Geometric Means of Historical Returns,” Business Valuation Review, Vol. 18, No. 3, September 1999, by Ian Gray with Brian Becker
  • “Using Average Historical Data for Risk Premium Estimates: Arithmetic Mean, Geometric Mean, or Something Else?” Business Valuation Review, Vol. 17, No. 4, December 1998, by Ian Gray with Brian Becker
2Presentations
  • Impact of tax reform on IP Valuation: Moving closer to traditional valuation norms? Impact on discount rates? panel at the NABE Transfer Pricing Symposium, Washington, D.C., July 2018, presented by Perry Urken
  • Transfer Pricing for Business Valuation Professionals, presented as part of a Business Valuation Resources Teleconference, June 2008, presented by Perry Urken

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