Tax Amortization Benefits and Intangible Asset Valuation

Intangible asset value is frequently estimated through consideration of a discounted cash flow analysis. Included as a component of the future cash flow forecast is the tax amortization benefit from amortizing the value of the intangible asset. The amortization tax benefit creates incremental cash flows associated with the intangible asset and reflects the income tax shield attributable to amortization of the asset over its tax life.