Brand Valuation

Abstract

Tangible assets (manufacturing assets, land, buildings and financial assets) have always been regarded as the main source of business value. However, market conditions in the last quarter of the twentieth century showed that a company’s value is not made up of its tangibles alone. The importance of intangibles, primarily the brand, but also patents, technology and employees has been recognized in the market, which lead to a dramatic shift in the market value of some companies relative to their book value. In spite of the fact that a company’s market value (shareholder value) has increased, brand contribution and its specific value remained unclear and were not specifically quantifi ed. Current accounting standards continue to deal mainly with tangibles to determine a company’s value. Brand is rarely explicitly and adequately valued and it appears very rarely on fi nancial statements. Even when it does appear, the numbers do not have a universally recognized economic and market foundation. In recent years, an increasing number of companies, agencies, and institutions have been trying to find an adequate brand valuation model. Currently, various models that provide more or less reliable data on brand value are in use. Standardized and dependable brand valuation system is necessary to establish reliably the real value of a company that owns it.brand, brand valuation, brand value.