Valuation of Brands
Intellectual property is recognized as the most important asset of many of the world’s largest and most powerful companies; it is the foundation for the market dominance and continuing profitability of leading corporations.
It is often the key objective in mergers and acquisitions and knowledgeable companies are increasingly using licensing routes to transfer these assets to low tax jurisdictions.
Management obviously need to know the value of the IPR and those risks for the same reason that they need to know the underlying value of their tangible assets because business managers should know the value of all assets and liabilities under their stewardship and control, to make sure that values are maintained.
Exploitation of IPRs can take many forms, ranging from outright sale of an asset, a joint venture or a licensing agreement. Inevitably, exploitation increases the risk assessment.
Brand Valuation can be an independent valuation in various commercial deals. Assume you owe a foot ware brand and a retail company wants to buy your brand and want to limit the availability of your brand only to his retail outlet. In that case you have to arrive at a monetary value you can ask for your brand from the proposing party. Similarly, you may need to get the breakup of franchise fee or knowing the value of trading rights.