Greenfield Method for Valuing Intangible Assets （绿地评估无形资产的方法）.pdf

Article Greenfield Method for Valuing Intangible Assets The Greenfield method is a modified form of discounted cash flow analysis and an acceptable method used to value certain intangible assets. By way of background, the Greenfield method assumes the subject asset is the only asset owned by the entity as of the valuation date. Assumptions are made regarding the start-up costs and capital investment required to utilize the subject asset. These assumptions are made with a view to developing an operation comparable to the one in which the subject asset is actually utilized. Thus, the Greenfield method forecasts the cash flows attributable to the subject asset by subtracting necessary investments. In this regard, the Greenfield method is sometimes referred to as the Build-Out method. The projected cash flows are then discounted back to the present value using a discount rate commensurate with the subject asset’s risk. By effectively constructing a start-up scenario, the Greenfield method excludes goodwill and going concern value. To this end, the fair value of the asset is determined directly via an income-based valuation approach. The Greenfield method is commonly used to value assets in industries that require a government license or permit to operate. The primary example is telecommunications, namely the television and radio- broadcasting industries wherein the method is utilized to value FCC licenses. Additional examples where the application may be appropriate include other subsets of tel