AD ALTA
JOURNAL OF INTERDISCIPLINARY RESEARCH
used as production premises of the model association XYZ, the
value of the property was determined at CZK 3,682,440 (20,458
CZK/m
2
* 180 m
2
= 3,682,440 CZK). Subsequently, the value of
land on which the given property is situated was deduced. The
land value in the given locality was determined at CZK
1,628,900 CZK (1,253 CZK/m
2
* 1,300 m
2
= 1,628,900 CZK).
After the deduction of the land value from the house value, the
value of the property was determined at CZK 2,053,540
(3,682,440 CZK – 1,628,900 CZK = 2,053,540 CZK). Given
that the activities of the association are operated only on the 30%
of the overall area of the property valued, the resulting value of
this property was determined at CZK 616,062 (30% out
of 2,053,540 CZK = 616,062 CZK).
The overall asset value of the model association XYZ is given in
Table 6.
Table 6: Overall asset value of model association XYZ
Item
Value
Inventories
992,471.65 CZK
Fixed tangible assets (vehicles + building)
1,891,203 CZK
Short-term tangible assets (low value)
84,303 CZK
Financial assets
344,805.35 CZK
Gross value
3,312,783 CZK
Liabilities(-)
563,409.06 CZK
Net value (after rounding)
2,749,374 CZK
Source: Authors.
The overall asset value of the association was CZK 2,749,374
(after rounding).
In order to value the model association XYZ using the selected
income-based method, the financial plan of the association for
the period of 2018–2021 was drawn. Table 7 shows the resulting
free cash flows after tax from all aforementioned years included
in the calculation in the 1
st
and 2
nd
stage of the used DCF
method.
Table 7: Selected cash flows after tax according to the financial
plan for the years 2018–2022
Year
Free cash flow after tax [CZK]
2018
177,630.81
2019
181,183.43
2020
184,807.01
2021
188,503.24
Source: Authors.
Subsequently, the value of the alternative costs of equity was
determined using Formula 1. The values of the individual
variables were obtained from the publicly available database of
the Czech National Bank (CNB) and the Ministry of Industry
and Trade of the Czech Republic (MIT CR). Table 8 shows the
input values in the calculation of the alternative cost of equity
using the selected build-up model.
Table 8: Items for calculating risk-free yield (r
e
) according to
CNB and MIT CR
CZ NACE 55
Risk-free yield
1.77%
Risk premium for business risk
2.65%
Risk premium for financial stability
1.87%
Risk premium for size of enterprise
1.09%
Source: CNB (2020) and MIT CR (2017) (own interpretation).
After the substitution in Formula 1, the following equation was
obtained:
=1.77%+2.65%+1.87%+1.09%
=.%
Alternative costs of equity were determined at 7.38% using the
build-up model. Next, Formula 2 was used to determine the
value the model association XYZ using the income-based
method DCF in the 1
st
=
177,630.81
(1+7.38%)
1
+
181,183.43
(1+7.38%)
2
+
184,807.01
(1+7.38%)
3
=165,422.62 +168,731.08 +172,105.62
stage. After substitution in Formula 2, the
following equation was obtained:
=506,259.31
Using the income-based DCF method in the 1
st
stage, the value
of the model association XYZ was determined at CZK
506,259.31 CZK. Subsequently, Formula 3 was used for
determining the value of the model association XYZ in the 2
nd
=
175,547.81
(7.38%−2%)∗
1
(1+7.38%)
3
stage of the calculation of the income-based DCF method. After
substituting in Formula 2, the following equation was obtained:
=2,829,869.09
Using the income-based DCF method, the value 2
nd
stage of the
calculation was determined at CZK 2,829,869.09.
By summing the first and second stage of the calculation using
the income-based DCF method, the resulting value of the model
association XYZ was obtained.
506,259.31 +2,829,869.09 ≅3,336,128
The value of the model association XYZ determined using two-
stage income-based DCF method was CZK 3,336,128 after
round.
Finally, the difference of the value determined using income-
based and asset-based method for the valuation of the intangible
asset of the model association XYZ was calculated.
−
=
3,336,128 −2,749,374 =586,754
Carrying amount of the model association XYZ´s intangible
assets that will, together with the tangible and financial asset, be
transferred to the newly established LLC was determined at CZK
586,754 using the methodology described in the methodological
part of this contribution.
5 Conclusions
The contribution determined the value of intangible assets by
means of application of selected modified valuation method.
The proposed modifications of the methodology were applied on
a specific model associaton XYZ, association of two natural
persons that joined on the basis of a contract of association. The
valuation was carried out first using the asset-based and then the
income-based valuation method. The valued accounting items
included inventories, low-value tangible assets, financial assets,
receivables and liabilities, and, for the purposes of the financial
calculation of the value of the model association XYZ´s
intangible assets, also its vehicle fleet and the property used for
the operation of the association´s activities (modified method).
In the second part of the contribution, the value of the model
association XYZ was determined using the income-based
method (two-stage DCF method). Using DCF method, the
subject of the valuation is valued as a whole, and thus its value
determined using this method includes also the value of the
model association´s intangible asset.
By calculating the difference of model association value
obtained using the aforementioned methodology (income-based
and asset-based valuation method), the valuation of the model
association XYZ was determined at CZK 586,754 (after
rounding).
The objective of the paper was thus achieved. The results show
that for correct determination of the carrying amount of
corporate intangible assets, it is necessary to consider all its
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