Valuation of contracts and relationships with clients

The valuation of contracts and relationships with clients includes, inter alia:
lists of clients,
order or production portfolio,
agreements with clients and related relationships,
non-contractual relationships with clients,
intangible assets arising from the contract.
Lists of clients
The list of clients consists of information about clients such as their names and contact data. The clients list can be in the form of a database that contains other client-related information, such as the history of their orders and demographics. Clients lists are often leased or exchanged.
Order or production portfolio
The order or production portfolio is the effect of purchase or sale contracts. When an entity establishes relationships with its clients through contractual arrangements, such relationships result from contractual terms.
Agreements with clients and related relationships
An agreement with a client and related clients relationships may constitute two separate intangible assets. Both the duration of use and the way of consuming the economic benefits of these two assets may vary.
Non-contractual relationships with clients
The connection of an entity to its clients occurs if the entity has client information and maintains regular contracts with the client, and the client can establish direct contact with the business. Client relations meet the contractual criterion if the entity has established a relationship with clients regardless of wheter the agreement exists as of the date of acquisition. Client relationships can also arise through other agreements, such as regular contacts maintained by sales or service representatives.
Intangible assets arising from the contract
Client relationships can also be a source of value creation in other areas of business operations. As a result of the cooperation, specific intangible assets can be created, such as know-how and product brands, which provide a lasting competitive advantage.
All of the above can have a significant impact on the value creation and can be subject to valuation. Valuation of these assets is used both for transactional purposes and for events requiring disclosure in the enterprise’s balance sheet.
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