Chapter 7Separability, Measurability, and Predictability
We have already discussed the absence of a single magic bullet for using intangibles to create an artificial value of a business; however, systems engineering enumerates a fairly clear path toward that valuation using three specific factors plus three specific tools. These factors and tools can allow a business owner or investor to identify and articulate the intangible assets that already exist.
The three factors I am speaking of here are:
- Separability;
- Measurability; and
- Predictability.
Separability is often the most difficult of these three to understand. A separable asset is not dependent on another asset for its value. It is distinct from other assets. For example, you may say that a person is good‐looking, a somewhat subjective assessment, but that is simply based on the geometry of their face. Perhaps this person would be able to attract compensation for that attractive face as a movie actor because that face is attached to a body and a voice; however, at least at present, a disembodied face, separate from body and head, cannot be valued as an asset. Separate a face from its head, and the core asset ceases to exist.
The phrase “I'm loving it!” is made up of three simple words, none of which are fundamentally owned by McDonald's, but when used together, these three words evoke a deep association with the brand. They are, nonetheless, separable from the brand and the company itself, valuable as a trademark or copyright. ...