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  • Brand Valuation

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    Brand valuation is the process of determining the economic value of intangible assets like brands, trademarks, and management expertise. It helps address challenges like linking a brand's value to a firm's economic value and separating a brand's value from other intangibles. Accounting standards from the late 1990s onward established that goodwill could be amortized over time while brands were not subject to amortization, but required annual impairment tests to adjust valuations. Brand equity represents a brand's meaning to consumers while brand value represents its meaning to the owning company.

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    Brand valuation is the process of determining the economic value of intangible assets like brands, trademarks, and management expertise. It helps address challenges like linking a brand's value to a firm's economic value and separating a brand's value from other intangibles. Accounting standards from the late 1990s onward established that goodwill could be amortized over time while brands were not subject to amortization, but required annual impairment tests to adjust valuations. Brand equity represents a brand's meaning to consumers while brand value represents its meaning to the owning company.

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    12 views6 pages

    Brand Valuation

    Uploaded by

    sashankreddyc
    Brand valuation is the process of determining the economic value of intangible assets like brands, trademarks, and management expertise. It helps address challenges like linking a brand's value to a firm's economic value and separating a brand's value from other intangibles. Accounting standards from the late 1990s onward established that goodwill could be amortized over time while brands were not subject to amortization, but required annual impairment tests to adjust valuations. Brand equity represents a brand's meaning to consumers while brand value represents its meaning to the owning company.

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    of 6

    BRAND

    VALUATION
    What is Brand Valuation?
    Intangible assets:

    • Architecture of the company

    • Trademarks

    • Brands

    • Branded Businesses

    • Management Expertise

    • Specialized processes

    • Knowledge and abilities of the employees


    Lessening Lacunae
    Less awareness about intangible assets

    Difficulty in applying the definition of an asset to


    brands
    Failure in linking brand value to the economic value
    of the firm
    No easy and visible method of separating brand
    value from the value of other intangibles
    History
    Accounting Standards –
    Brand Valuation
    1999 – UK, Australia and New Zealand (FRS 10 and
    FRS 11)
    2002 – US (FASB 141 and FASB 142)

    Rules effectively amended to read that:

     Good will could be capitalised and amortised over


    the useful life of the asset

     Brands could claim an infinite life and were not subject


    to amortisation

     Companies needed to perform 'annual impairment tests'


    to value the brand and adjust it higher or lower, based on
    the value obtained
    *
    Brand Equity vs. Brand Value
    Brand Equity represents what the brand means to
    the consumer
    Brand Value represents what the brand means to
    a focal company
    Quaker Oats – Snapple

    Lee Jeans – Walmart

    *Raggio R. D., & Leone R. P. (2007). The Theoretical Separation of Brand


    Equity and Brand Value: Managerial Implications for Strategic Planning,
    Journal of Brand Management, 14(5), 380-395.

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