Software can be an extraordinarily valuable asset for many companies. It is a staple for nearly all types of businesses. In fact, it is embedded everywhere! It is in equipment like scanners, milling machines, lathes, sorters, medical equipment, and telephone systems. And that software generally has favorable tax treatment. However, many vendors do not itemize the software’s cost when they sell equipment. Consequently, many companies do not realize this savings opportunity because they cannot quantify the software cost. This issue costs companies millions each year. At P&A, we provide software valuations that can help companies realize this savings opportunity.
Software valuations often involve an understanding of the technical and business application for the software to properly determine and isolate the value. At Pellegrino and Associates, we have the proper foundation to defend our software valuation in strict accordance with federal appraisal standards because we authored and published the first paper on embedded software valuation and have helped to shape the tax laws that surround embedded software valuation. Michael Pellegrino, the President of Pellegrino and Associates, has worked as a professional software developer, created and sold software products, and currently maintains one of the largest known patent data warehouses.
What Are Common Situations?
Clients also seek our software valuation services to help them facilitate business activity. Common situations for which we value software include the following:
- Asset sales
- Asset purchases
- Capital formation
- Transfers and estate planning
- Fair value reporting under SFAS 157
- Litigation support for copyright infringement damages
- Fair market value reporting under Revenue Procedure 59-60
- Compliance with valuation requirements under the Stark Law Anti-Kickback Safe Harbor regulations
Contact us today for your software valuation needs!
Pellegrino & Associates, LLC
10333 N. Meridian St, Suite 150
Carmel, IN 46290
2570 N. First St, 2nd Floor
San Jose, CA 95131
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