We know that an asset has an estimated value. It shows the reality of the cash flows created by the asset, and also that it (the asset) can be sold and the transaction price will be known in advance.
If you think about all the situations when a company needs a brand assessment, it will be a long list:
When contributing rights to a trademark to the authorized capital.
When determining the terms of transfer of a license or franchise.
During the privatization lithuania email list of a state enterprise, in order to more objectively evaluate the assets being privatized.
In mergers and acquisitions for a more objective assessment of business value.
Court proceedings.
During the IPO and negotiations with potential investors.
When raising funds, if the collateral is a brand.
To evaluate the effectiveness of investments in marketing programs.
In creating economically sound brand development programs.
When assessing the effectiveness of marketing services and developing a bonus scheme for their employees.
To disclose information to creditors/shareholders about the nature of the company's value creation.
How to Calculate Brand Value
Source: shutterstock.com
In short, a brand is a company's asset, and its evaluation is necessary in the business process. It exists in the minds of people (real and potential consumers of branded products, management and marketers). But why is it still not reflected in financial statements?
Despite the fact that the purpose of reporting is to inform stakeholders about the financial position of the company, expenses for reorganization, training, advertising and research, brand names, personnel qualifications, market and technical knowledge, client portfolio, market share, business reputation, etc. are prohibited from being reflected in reporting. The brand also belongs to such assets. At the same time, if these assets are often key, how can information about the company be complete without them?
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Alexander Kuleshov
Alexander Kuleshov
General Director of Sales Generator LLC
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