Tax amortization benefit


In Valuation (finance), tax amortization benefit (or tax amortisation benefit) refers to the present value of income tax savings resulting from the tax deduction generated by the amortization of an intangible asset.
The present value of the future tax savings is a mathematical function of the fair market value. This creates circularity, because the fair market value includes the present value of the tax savings.

Related formulas


FMVThe fair market value of the intangible asset (dimensionless)
VBABThe value of the intangible asset before amortization benefits (dimensionless)
TABfactorTAB factor (the value assuming end-year discounting) (dimensionless)