How do you value technology / IP in PPA: cost approach versus income approach?

The cost approach estimates what it would cost to recreate or replace the technology, adjusted for obsolescence. The income approach values the cash flows generated by the technology, often through MEEM, relief-from-royalty, or incremental cash-flow methods. Use cost approach for early-stage or internally used technology with limited direct revenue; use income approach when the IP clearly drives revenue or cost savings.