What is the value of a fully registered Quality Manual?

[harry]

I think you should start with an estimate of the 'cost' based on the man-hours involved. From there, how many times above the cost that the company is willing to pay is based on 'willing seller willing buyer'.

The good thing about it being rare is that you can charge even more - specialized and customized.

 

[tomvehoski]

So if I understand correctly, you own a corporation. Your corporation contracted yourself to develop a quality manual, and you want to know how much you, as an individual, should charge your company.

Sounds like you need a tax accountant. They should be able to tell you how to fix the value, and if it is even legal to do so based on the setup of your corporation and Canadian law.

 

[Wes Bucey]

I agree the situation as described does not lend itself to "market value," let alone "fair market value" which tax authorities in many jurisdictions require when transferring property at less than arm's length (a term of art used to describe transfers between affiliated or related parties - in this case you and your corporate entity.)

In such cases, tax authorities usually have well-defined rules to value work product (over and above entrepreneurial effort in creating a corporate entity) for taxing purposes.

In the USA, the IRS is phasing out "private rulings" - in essence, a one-off decision by the tax authority for one-of-a-kind situations similar to yours. Perhaps Canada still offers those. A good tax attorney or CPA (chartered accountant in some jurisdictions) is a better and surer route to a definitive answer than an international discussion forum which focuses on matters usually far removed from taxes.

 

[Wes Bucey]

A thought strikes me for adding to your conversation with attorney or accountant - this valuation might be similar to a patent or a trademark for an organization which has yet to enter the market with a product, thus obviating the calculation of the value of a stream of income and good will created in the market place. Essentially, the in-place documentation gives your organization a "franchise" - entry into the supply chain of aerospace, something extremely difficult to accomplish WITHOUT registration to such international Standards.

 

[dv8shane]

I agree the situation as described does not lend itself to "market value," let alone "fair market value" which tax authorities in many jurisdictions require when transferring property at less than arm's length (a term of art used to describe transfers between affiliated or related parties - in this case you and your corporate entity.)

In such cases, tax authorities usually have well-defined rules to value work product (over and above entrepreneurial effort in creating a corporate entity) for taxing purposes.

In the USA, the IRS is phasing out "private rulings" - in essence, a one-off decision by the tax authority for one-of-a-kind situations similar to yours. Perhaps Canada still offers those. A good tax attorney or CPA (chartered accountant in some jurisdictions) is a better and surer route to a definitive answer than an international discussion forum which focuses on matters usually far removed from taxes.

Indeed the reason I am looking for input as to an estimated value is that the transaction has to be at arms length if possible. I could just assign a number but with nothing to reference it to, I chose to ask for help.

The discussion was not supposed to be about taxes and I think the most prudent method may be as suggested earlier that I add up the time on each document for creation editing etc. Any ideas as to the hourly rate others charge for work like this?

 

[Wes Bucey]

Indeed the reason I am looking for input as to an estimated value is that the transaction has to be at arms length if possible. I could just assign a number but with nothing to reference it to, I chose to ask for help.

The discussion was not supposed to be about taxes and I think the most prudent method may be as suggested earlier that I add up the time on each document for creation editing etc. Any ideas as to the hourly rate others charge for work like this?

Hourly rates range from $25 to $100 and up, depending on the speed and also on the counseling and training which go along with the pure writing task. (i.e. writing the documents is essentially a "ghostwriting job.") Ghostwriters vary in how they are paid, depending on whether the finished product is sold (like a book or magazine article) or given away (a marketing newsletter or [one case I am familiar with] a series of increasingly demanding collection letters used by a large midwestern utility in chasing tardy payments. The one where the product is sold usually gets an upfront fee and a share of continuing royalties. The other type is a once and done fee.

In terms of once and done, I am also aware of one large corporation which hired a ghostwriter to create (including art and typography) its annual report to shareholders after a particularly bad year. (Such a report is different from the 10K report prescribed by the SEC.) As I was going over the books of the corporation the following year, I discovered a line item of $100,000 for the fee. Essentially the job was "spinning" the data contained in the 10K to make the entrenched officers and board look more competent than they had been.

 

[harry]

You may want to look at Intellectual property valuation for some ideas.

 

[dv8shane]

A thought strikes me for adding to your conversation with attorney or accountant - this valuation might be similar to a patent or a trademark for an organization which has yet to enter the market with a product, thus obviating the calculation of the value of a stream of income and good will created in the market place. Essentially, the in-place documentation gives your organization a "franchise" - entry into the supply chain of aerospace, something extremely difficult to accomplish WITHOUT registration to such international Standards.

Wes

First thank you very much for your input.

Yes I had originally thought of offering it commercially as the company is registered and the system is proven. It could have been easily adapted and packaged for retail. With no similar products on the market.

Shane