Brands significantly contribute to the overall value of a company. In a great variety of challenging situations, BV4 can calculate the financial value of brands using both scientifically founded and standardized methods. Our objective as a value appraiser is to determine an objective brand value that is accepted by the relevant stakeholders.
BV4 calculates valid and objective brand values in the following concrete situations:
Brand transactions (due diligence)
In the context of fusions and M&A situations, we calculate the monetary value of the brand(s) involved. In a due diligence process, we also analyze the strength of the brand and evaluate the risk of its future development. The brand value we calculate significantly supports and objectifies the price negotiations.
Purchase Price Allocation
In a purchase price allocation, a process which analyzes the distribution of the acquisition costs of an investment, we calculate the fair value of the brand(s) being purchased. This allows to determine which part of the goodwill can be attributed to the brand and therefore be capitalized according to applicable accounting regulations.
Reporting brands in balance sheets
When derivative brands and licenses are acquired, we calculate the value of the purchased brand in order to capitalize it at a fair value in the balance sheet. If the applicable accounting regulations allow it, original, i.e. self-created brands can also be capitalized.
Certain accounting regulations require periodical impairment testing of capitalized intangible assets. With an impairment test, which has to be executed at least once a year, we determine the fair value of the capitalized brand(s).
Deriving transfer prices for IP
Establishing an internal licensing structure (a so-called IP-Box) where an internal transfer price is paid for the utilization of the brand creates two important advantages. On the one hand, the complete brand management know-how can be centralized, thus allowing more cost-efficient management of the brand. On the other hand, the new licensing structure also allows fiscal advantages to be achieved. We have an experienced network of specialists and the necessary know-how for planning and establishing such a structure.
In legal disputes involving brands (e.g., brand piracy), the brand value that we determine can be used as a basis for calculating damages claimed. Because we are an independent appraiser, our calculated brand values are accepted by the relevant stakeholders.