Mark Zyla, founder of Zyla Valuation Advisors, highlights intangible assets as a key contributor to a businesses value

In the field of finance, accountants, valuation experts, and other professionals are vital for ensuring a business runs smoothly and efficiently. Evaluating the worth of a company may be required because shareholders want to assess their market value, apply appropriate accounting standards, or they may need a report to handle legal issues. Regardless, business valuation allows executives to see an unbiased view of their organization. By highlighting the strengths and weaknesses of a business, decision makers can adjust practices or leverage their advantages. 

When speaking about intangible assets, accountants and other industry professionals manage them differently. In both Generally accepted accounting principles (GAAP) and international financial reporting standards (IFRS) intangible assets are only recognized in a business combination, creating a gap in the market capitalization and financial reporting. Mark Zyla, a CPA and CFA within the United States tackles these valuation challenges at his firm, Zyla Valuation Advisors (ZVA).

Zyla Valuation Advisors specializes in evaluation services for financial reporting, legal disputes, and intellectual property. The company’s team has handled many projects involving acquisitions, shareholder rights disputes, and tax planning and business strategy. ZVA has clients spread across the United States, but also completes work for international partners in need of valuation expertise. 

Mark accredits his company’s success to its non-traditional approach of having a distributed team that can flexibly handle projects from any location. This design allowed ZVA to be prepared for the shift to remote working, which happened shortly after the company was founded.

As an accounting and valuation professional with almost 40 years of experience, Mark not only understands the importance of a business valuation to leadership, but he is also sensitive to the professions best practice. This is due to Mark’s diverse working experiences at large accounting firms, serving as Chairman of the Standards Review Board IVSC, and also being a lecturer in finance at the University of Texas at Austin.  

Mark was motivated to open Zyla Valuation Advisors in 2019 because he needed the flexibility to address the complexity of valuations. He had seen this issue when accounting shifted during the 2000s tech boom and wrote a book 10 years later addressing the best practices for valuations in financial reporting.  

Mark’s book was eventually used by the American Institute of CPAs to teach accountants how to comprehensively assess business valuation and its various components. Several new editions of the book were published to include financial trends and emerging topics within the profession. Mark feels proud to have created a framework that continues to help new and experienced accountants understand the complexities behind understanding value creation.

Intangible assets can be acquired or created by a business and they come in many forms such as intellectual property like brand trademarks and patents. They can be indefinite or definite life span and are valued based on factors like market, income, and cost. A valuation professional will compare the value of similar assets, the cash flow they create, and what impact they have on the company. Intangible assets can be anything from computer software to customer relationships, and sustainability efforts and they can be calculated in multiple ways. In a CFA article, Mark highlighted some proven methods for doing so. 

The first technique he listed was the Relief from Royalty Method (RRM), which is commonly used for calculating the value of intellectual property. Mark further details other useful methods for completing valuations such as The Multi Period Excess Earnings Method (MPEEM), With and Without Method (WWM), Real Option Pricing, and more. Mark hopes that his contributions to valuation services in accounting will allow companies to receive world-class support when they need this expertise.

“Recognizing effective valuation techniques and methodologies and then applying them to intangible assets has been a challenge over the years. Accountants and other finance professionals are trying their best to develop leading practices to capture a more accurate picture of intangible asset’s worth,” says Mark Zyla, “I hope that my work at Zyla Valuation Advisors and the training book I’ve created can help accountants understand how information economies and more complex assets can be understood.”