Trademark Valuation in UAE
Find Value of Your Trademark in UAE
In the new world of brands, we always encourage our clients to value their brands and find the monetary value of their trademark in the market. As we have been certified by the Dubai Chamber of Commerce to do evaluation of trademark in the local market. We can assist our clients in doing the same. Trademark Valuation a very discreet and fruitful process for a trademark owner. As when you are about to rent out your brand you can actually prove the money value to your clients and negotiate by adding it as an asset.
We have a team of trained professional, who can do the valuation of your Trademark.
Brand equity needs to be distinguished from brand valuation, which is the job of estimating the total financial value of the brand. Like the valuation of any product, of self review, or conflicts of interest if those that value the brand also were involved in its creation. The ISO 10668 standard sets out the appropriate process of valuing brands and sets out six key requirements, transparency, validity, reliability, sufficiency,objectivity and financial, behavioural and legal parameters.
There are three main types of brand valuation methods:
The Cost Approach:
The cost approach measures the value of a brand as the cost invested in its creation and development. The idea being that an investor would not pay more for a brand than it would cost to recreate or replace it. However, since this approach is based on retrospective data it does not consider a company's future earnings.
The Market Approach:
The brand is valued based on what others in the market have paid for similar assets. With so few brands being bought and sold, using this method may be as difficult as finding a recent sale of another brand with a similar awareness, strength, or economic and legal situation against which to benchmark.
The Income Approach:
This approach measures the value by reference to the present value of the economic benefits received over the rest of the useful life of the brand. There are 6 recognised methods of the income approach.
1. Price premium method - estimates the value of a brand by the price premium it generates when compared to a similar but unbranded product or service. This must take into account the volume premium method.
2. Volume premium method - estimates the value of a brand by the volume premium it generates when compared to a similar but unbranded product or service. This must take into account the price premium method.
3. Income split method - this values the brand as the present value portion of the economic profit attributable to the brand over the rest of its useful life. This has problems in that profits can sometimes be negative, leading to unrealistic brand value, and also that profits can be manipulated so may misrepresent brand value. This method uses qualitative measures to decide the portion of economic profits to be accredited to the brand.
4. Multi-period excess earnings method - this method requires a valuation of each group of intangible assets to calculate the cost of capital of each. The returns for each of these are deducted from the present value of future cash flows and when all other assets have been accounted for, the remaining is used as the value of the brand.
5. Incremental cash flow method - Identifies the extra cash flow in a branded business when compared to an unbranded, and comparable, business. However it is rare to find conditions for this method to be used since finding similar unbranded companies can be difficult.
6. Royalty relief method - Assume theoretically a company does not own the brand it operates under, but instead licenses the use from another. The royalty relief method uses available data of similar arrangements in the industry and assigns the value of the brand as the present value of future royalty payments.
Uses of brand valuation
Common purposes are:
· value reporting
· dispute resolution
· legal transaction
· strategic planning
· management information
· taxation planning and compliance
· litigation support