Brand Valuation Accouting: Puttu Guru Prasad Inc Guntur

BRAND VALUATION ACCOUTING PUTTU GURU PRASAD [email protected] INC GUNTUR

BRAND VALUATION ACCOUTING  Several

major companies believe that their brands are there most valuable assets. This explains the increasing importance placed on brand creation and management . This also explains the reason for paying vast sums of money to acquire brand-rich companies.

BRAND VALUATION ACCOUNTING 

The idea of brands as financial assets emerged in mid eighties. As brands have significant financial value, their absence from the balance sheet distorts the true financial position of a company. Hence ,in order to ensure that the market valuation of a company is reflective of its true intrinsic worth it has become necessary for companies to determine the values of their brands

Brand Earnings Multiple  An

assessment of brand strength requires detailed review of the brand, its positioning, customer loyalty, the markets in which it operates, competition, stability, long-term trends, statutory protection, brand management by the companies, etc. Based upon the above factors, an appropriate multiplier is determined

Methods of Brand Valuation  Earnings

valuation method  1.Determine the brand earnings  2. Determine the brand strength or brand earnings multiple  3. Compute the brand value by multiplying the brand earnings with the multiple derived in step 2

Methods of Brand Valuation  Cost

method:- this method involves stating the brand valued at its cost to the company. This is relatively easy when the brands are acquired. The money paid to buy the brands can be directly stated. It is more difficult to value the brand when the brand has been developed in house by the company