Brand Valuation Methodology
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.
Brand Valuation Process
brand value Determination process
