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Intangible Asset Valuation

by simonmak-ascent
OverviewSchemaSourceRelated ServersDiscussionsAdmin
Python
Hybrid

Goodwill & Purchase Price Allocation

valuation_goodwill_ppa
Read-onlyIdempotent

Allocate purchase price to identified intangibles, calculate residual goodwill, and estimate useful life for ASC 805/IFRS 3 business combinations.

Instructions

Goodwill and purchase price allocation: goodwill as the residual, a full PPA waterfall across identified intangibles, and useful-life estimation. Method selects the formula. Use for ASC 805 / IFRS 3 business combinations; purchase_price_allocation allocates consideration to identified intangibles with the remainder to goodwill. For subsequent goodwill and intangible impairment testing use valuation_impairment; for individual intangible fair values feed valuation_ip, valuation_technology or valuation_customer into the allocation. Per method: goodwill needs purchase_price + fair_value_net_identifiable_assets; purchase_price_allocation needs purchase_price + tangible_assets_fv + identified_intangibles (optional: liabilities_fv); useful_life needs asset_type (optional: legal_life, economic_factors, obsolescence_rate). identified_intangibles values are summed before goodwill is taken as the residual; liabilities_fv reduces net identifiable assets. Only method is required; all other parameters are method-dependent — supply those the selected method names and omit the rest (defaults apply where defined). Rates and premiums are decimals (0.10 = 10%). Pure arithmetic: no I/O and no external calls, rounded to 2 decimals; parameters belonging to other methods are accepted and ignored. An unknown method, or a missing method-required parameter, returns an error instead of a value.

Input Schema

TableJSON Schema
NameRequiredDescriptionDefault
methodYesFormula to apply. Options: goodwill = Goodwill = purchase price - fair value of net identifiable assets.; purchase_price_allocation = Allocate consideration across identified intangibles.; useful_life = Estimate economic/legal useful life of an intangible.
asset_typeNoAsset type, e.g. "patent", "trademark", "software", "customer_list".
legal_lifeNoLegal protection period in years (overrides the asset-type default).
liabilities_fvNoFair value of assumed liabilities, in currency units.
purchase_priceNoTotal consideration / purchase price, in currency units.
economic_factorsNoEconomic adjustment factors, e.g. {"market_growth": 0.05, "competition": 0.4, "tech_change": 0.1}.
obsolescence_rateNoAnnual obsolescence rate as a decimal in [0,1].
tangible_assets_fvNoFair value of tangible assets, in currency units.
identified_intangiblesNoIdentified intangibles, each {name, value} or {name, fair_value}.
fair_value_net_identifiable_assetsNoFair value of net identifiable assets, in currency units.

Output Schema

TableJSON Schema
NameRequiredDescriptionDefault
errorNoError message when the call fails.
stepsNoIntermediate calculation steps for traceability (one string per step).
valueYesComputed valuation, rate, or metric.
methodNoFormula / method name that produced the result.
assumptionsNoModelling assumptions applied (list of strings or key/value object).
defaults_appliedNoOptional parameters that were not supplied, so their documented defaults were used.
formula_referenceNoMathematical formula or reference applied.

Schema Changelog

Changes observed during successful MCP inspections.

  1. Changed1 schema field changedv2.1.1
    • addedOutput schema / properties / defaults_applied
      Added value: +{
+  "description": "Optional parameters that were not supplied, so their documented defaults were used.",
+  "items": {
+    "type": "string"
+  },
+  "type": "array"
+}
  2. Changed1 schema field changedv2.0.1
    • changedInput schema / properties / obsolescence_rate / description
      Previous value: -"Annual obsolescence rate as a decimal."New value: +"Annual obsolescence rate as a decimal in [0,1]."
  3. Changed2 schema fields changedv0.1.4
    • changedOutput schema / properties / steps / description
      Previous value: -"Intermediate calculation steps for traceability."New value: +"Intermediate calculation steps for traceability (one string per step)."
    • removedOutput schema / properties / steps / items / type
      Removed value: -"object"
  4. First observedv0.1.0

TDQS

A4.8/5.0
Behavior5/5

Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

Annotations already mark this as read-only, idempotent, closed-world, but the description adds behavior beyond them: 'Pure arithmetic: no I/O and no external calls, rounded to 2 decimals', 'parameters belonging to other methods are accepted and ignored', and explicit failure behavior ('An unknown method, or a missing method-required parameter, returns an error instead of a value'). This is exactly the extra context annotations cannot convey.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Conciseness4/5

Is the description appropriately sized, front-loaded, and free of redundancy?

Purpose and scope are front-loaded in the first two sentences, followed by alternative routing and then the per-method parameter rules. It is dense and long, but each sentence carries distinct information; only the per-method detail could be trimmed by relying more on the enum descriptions.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Completeness5/5

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

For a 10-parameter, method-dispatched arithmetic tool with an output schema present, the description covers purpose, alternatives, conditional parameter requirements, units, rounding, and error behavior. Nothing an agent needs to invoke it correctly is missing, and return values are legitimately delegated to the output schema.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Parameters4/5

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

Schema coverage is 100%, so the baseline is 3, but the description adds the cross-parameter dependency matrix schema cannot express: which parameters each method requires, which are optional, and the semantics that 'identified_intangibles values are summed before goodwill is taken as the residual' and 'liabilities_fv reduces net identifiable assets'. It also restates the decimal convention for rates.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Purpose5/5

Does the description clearly state what the tool does and how it differs from similar tools?

The description names a specific verb+resource ('goodwill as the residual, a full PPA waterfall across identified intangibles, and useful-life estimation') and immediately scopes it to ASC 805 / IFRS 3 business combinations. It also differentiates itself from siblings by naming valuation_impairment for subsequent testing and valuation_ip/technology/customer for individual intangible fair values.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Usage Guidelines5/5

Does the description explain when to use this tool, when not to, or what alternatives exist?

Explicit routing: 'Use for ASC 805 / IFRS 3 business combinations', 'For subsequent goodwill and intangible impairment testing use valuation_impairment', and 'for individual intangible fair values feed valuation_ip, valuation_technology or valuation_customer into the allocation'. Both when-to-use and alternatives are stated, plus the per-method parameter conditions.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.

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