What Does Multi Period Excess Earnings Method Mean?

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What does Multi Period Excess Earnings Method mean? Read on to discover the definition & meaning of the term Multi Period Excess Earnings Method - to help you better understand the language used in insurance policies.

Multi Period Excess Earnings Method

Multi Period Excess Earnings Method

A financial valuation model often used in valuing customer-related intangible assets that estimates revenues and cash flows derived from the intangible asset and then deducts portions of the cash flow that can be attributed to supporting assets, such as a brand name or fixed assets, that contributed to the generation of the cash flows. These deductions are sometimes referred to as "supporting asset charges." The resulting cash flow, which is attributable solely to the subject intangible asset, is then discounted at a rate of return commensurate with the risk of the asset to calculate a present value.

We hope the you have a better understanding of the meaning of Multi Period Excess Earnings Method.

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