Patent valuation and recognition according to TAS 38: A case study

Patent is an intellectual property right that gives a right to produce, use, and sell a particular asset in a particular time period and at the same time it is an intangible asset that the owner company can show it in its financial statement. The aim of this study is to show how to value a patent and how to account it. For this purpose, intellectual property rights and especially the concept of patent are emphasized in the first part of this study. In the second part, the concept of valuation is explained and valuation methods are mentioned. There is also literature review in the second part. In the third part, recognition of a patent is tried to be explained in the respect of TAS 38: The Standard of Intangible Assets. There is a patent valuation example in the last part of the study. Case study technique was used as the method of the study. As a result, although there is no generally accepted patent valuation method, it has been observed that the results obtained by modern valuation approaches are more consistent than the results obtained by traditional valuation approaches according to the example in the study.