Tax amortization benefit factor

Description

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 tax amortization benefit factor (or TAB factor) is the result of a mathematical function of a corporate tax rate, a discount rate and a tax amortization period.

Related formulas

Variables

TABfactorTAB factor (the value assuming end-year discounting) (dimensionless)
tThe corporate tax rate applicable to the future amortization of the asset (dimensionless)
nThe tax amortization period of the asset in years (dimensionless)
kThe discount rate (dimensionless)