Department

Technology Checklist

The questions to ask of a technology business when reviewing its accounts — focused on intangibles, IP and the convertibility of revenue.

1

Nature of the Business

What does it do? Is it providing goods or services?

2

Intangible assets

Where does the intellectual property, goodwill and other intangible assets appear in the balance sheet?

3

Rights holder of the assets

In a group structure, who is the rights holder of the assets and what is the duration of the intellectual property?

4

Potential Liabilities

Is there any litigation and if so, what is the status? Is there any intellectual property due to expire? Are there any regular fines or payments to regulators? Are there any statutory inquiries?

5

What has happened to the assets?

What has happened since the beginning of the assets? How have the tangible assets depreciated? How have the intangible assets been amortised?

6

What is the shelf-life of the business?

What is the sustainability of the growth? What is the long-term potential?

7

What is the convertibility of revenue?

Are there long term contracts or licenses? Might there be in the future?

8

Ownership structure

Who is the ultimate controlling party?

9

What should I expect to find?

Think about what you expect to find in a business. Buildings? Employees? Sales? Goodwill? Debts? Profits?

10

Goodwill

What is the intangible asset that arises when one company acquires another and pays more than the fair value of its net identifiable assets?