Intangible asset valuation

Putting a number on the brand

A valuation is needed at specific moments: raising capital, selling the business or a line of it, licensing or franchising, bringing an asset into a company as a contribution, calculating damages in an infringement claim, or putting the asset on the balance sheet.

Outside those moments it is an interesting exercise. Inside them it is a number that has to withstand somebody arguing against it.

How it is approached

• Income. What the asset is expected to generate, or the royalty you would otherwise pay to use it, brought to present value. Usually the most defensible for a brand with trading history.
• Market. What comparable assets have changed hands for, where genuine comparables exist, which for intangibles they often do not.
• Cost. What it would take to build an equivalent. Weakest on its own, since it measures spending rather than value.

The legal position is part of the number

This is where a valuation done without a lawyer tends to fail. An unregistered brand, a registration in the wrong name, classes that do not cover the actual products, a lapsed use declaration or a licence granted to a distributor all change what the asset is worth, and a buyer will find them. A valuation built on an asset that has not been verified legally is a number waiting to be discounted.

What we do

We verify the legal position first, then work with the financial analysis so the valuation rests on an asset that is actually owned, actually registered and actually enforceable. Where the position is weak, we say so and set out what would have to be corrected before the number is credible.