Our methodology is as per international best practices and easy to understand
We determine brand value using the Royalty Relief Method of Income Approach. We determine value; a company would be willing to pay to license its brand as if it did not own it. We follow following steps;
Determine Brand Strength Index Scope through Brand Survey
Determine the most suitable royalty rate out of royalty range for the respective brand sectors. This is done by reviewing and cross verifying with data from international sources.
Determine royalty rate using a well-defined universal approach.
Determine brand specific revenues and cross check with historical and industry growth & performances indicators.
Determine implied royalty charge by applying royalty rate to forecasted revenues.
Determine discount rate, terminal growth rates, effective tax rates etc.
Determine Net Present Value of post-tax forecasted royalties and terminal value.
NPV represents current value of the future income attributable to the brand asset.
Why this approach
It is as recognized as “International best practice?
It is favored by tax authorities
it calculates values by reference to well documented third party transactions
Publicly available information is used.
Compliant with requirements of International Valuation Standards Authority and ISO 10668.