Brand Valuation

“If this business were split up, I would give you the land and bricks and mortar, and I would take the brands and trademarks, and I would fare better than you.”

– John Stuart, Chairman of Quaker (ca. 1900)

Corporations are increasingly beginning to realize that a large part of their market cap is attributable to the value of the brand(s) they own – which is often more than the value of their tangible assets. For example, over 70% of the shareholder value of McDonald’s Inc. is attributable to the brand McDonald – and that number is over 50% in the case of Coca-Cola.

Brand valuation has emerged as a new discipline in the last 30 years. Today, some of the companies have started showing value of their brands on their Balance Sheets. That has necessitated development of Accounting Standards to value intangibles. Financial Reporting Standards (FRS) 10 and 11 were introduced by the UK Accounting Standards Board in 1999 followed by International Accounting Standards Board with IAS 38.

There are different reasons why you may need to value your brands

  • You are looking to license your brand
  • You want to get the true valuation for your company at the time of sale or partial divestment
  • There is a dispute/litigation pertaining to your brand or IP
  • There is a regulatory or accounting compliance requirement
  • You want to incorporate enhancement of your brand value in the strategic planning process
  • You want to measure the return on brand investments.

DY Works has considerable expertise in valuation of brands and works with partners to value yours. We follow a scientific approach by identifying the key differentiators of your brand – the factors that enable your brand to enjoy sustained consumer pull resulting in higher volume or pricing or both. Each causal factor is quantified by our experts and then that is incorporated in the valuation process.

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