Brand Valuation Services
Intangible asset valuations
Singapore is home to some of Asia's most recognizable brands, including DBS Bank, SingTel and Singapore Airlines. These brands understand the value of their intangible assets and invest significantly in protecting and leveraging their brands.
Intangible assets (items such as data, content, software code, company and product brands, confidential information, inventions, patents, industrial know-how and design rights) account for more than 87% of all company value today. They are now the primary driver of company profitability and growth and are recognized by the Singapore Government as being key to the country's ongoing economic success.
Unfortunately, brand and other intangible assets are essentially ignored by modern International and Singapore accounting standards. They either never make the balance sheet, are lost under the amorphous term “goodwill,” or are listed at cost (and there is essentially no correlation between cost and value with intangible assets).
Why should I value my brand?
Conventional valuation methods tend to significantly undervalue brand and other intangible assets, leading to intangible asset-rich companies not having their true worth fully recognized.
For example, a recent report from the UK Treasury highlighted that although the world’s five most valuable companies are together estimated to be worth US$4.6 trillion, their balance sheets report just US$225 billion of tangible assets. The other US$4.3 trillion of value is missing in action.
This is also evident in Singapore where a similar scenario occurs when looking at a number of the top Singaporean brands.
This is a major problem for shareholders managers and directors because it means that:
Companies that have invested significantly in building up their brand, may leave money on the table in a transaction situation if the brand is not accurately valued.
Many intangible asset-rich businesses are significantly undervalued relative to their true value.
Many companies own valuable intangible assets are unaware of them and are unable to leverage them because their financial accounts do not refer to them
When should I value my brand?
Understanding the true value of your brand, and other intangible assets, is essential if your organization is:
Selling or listing on a public market
Raising equity or debt capital
Conducting mergers and acquisitions activity (buy or sell-side)
Entering into Joint Venture, Partnership or Alliance arrangements
Entering into license or royalty rate negotiations
Involved in an intangible asset or intellectual property litigation
Paying tax involving intangible assets or intellectual property (especially across multiple jurisdictions)
Conducting research and development
Wanting to manage all assets (both tangible and intangible) effectively
In short, given that brand, and other intangible assets, now account for virtually all company value, it is impossible to understand the true value of a company without a detailed understanding of its intangible assets.
This applies equally to investors or company owners – if you want to maximize your return on investment, an accurate and robust valuation of the company's critical intangible assets (including brand) is essential.
How does an intangible asset brand valuation work?
Because brand, and other intangible assets, have been largely ignored by accounting standards, valuing these assets is an area that remains poorly understood. Many accountants and valuation providers erroneously claim “you cannot value data/ brands/content/patents etc”. This is incorrect.
While more complex than a conventional valuation, there are methods of valuing brand and other intangible assets that are reliable, accurate and robust.
Modern intangible asset valuation methodologies work from the general principle that a strong intangible asset position delivers enhanced competitive advantage which in turn translates into superior market share or margins and ultimately significantly increases the value of the business.
For Singapore companies wanting to maximize their value, it is critical to ensure that brand and other intangible assets are captured in any valuation process.
EverEdge BenchMark™ Intangible Asset Valuation
Our Singapore-based valuations team uses a proprietary three-factor model, EverEdge’s BenchMark™ Intangible Asset Valuation. The methodology utilizes both traditional quantitative methods but importantly also analyzes the contextual and qualitative factors. This is critical as these factors are primary drivers of intangible asset value.
This enables both companies and investors to:
Better understand the true value of their brand and the role it plays in driving profitability and growth
Make significantly more informed decisions regarding exits, capital raises, and M&A, JV or license transactions
Better articulate value to potential investors or acquirers to drive increased pre-money or exit values or to potential JV or alliance partners
More robustly defend license or tax transactions or litigation positions
Make better decisions regarding which R&D projects are likely to generate the best “bang for buck"
EverEdge BenchMark™ Intangible Asset Valuations provide companies and investors with robust, defensible valuations that articulate the true value of your company or critical intangible assets.
How will EverEdge help me justify my valuation?
A broad range of factors are typically reviewed in a brand and intangible asset valuation, which means the resulting report tends to be more expansive, with a greater emphasis on prose, explanation, and evidence than endless (easily manipulated) spreadsheets.
An EverEdge BenchMark™ Intangible Asset Valuation will read as a robust, defensible, business-focused report that articulates and contextualizes the value of the most valuable and important assets the company owns today - your brand and other intangible assets.
The valuation will be built on a solid interlocking framework of multiple, well-researched factors that together support a value that can be relied on. This enables companies to seek – and secure – better outcomes during transactions and to better understand day-to-day how their intangible assets can be managed to drive additional growth and profitability.
EverEdge's Singapore-based team is also available to meet with investors, counter-parties to M&A or JVs, regulators or tax authorities or appear as expert witnesses to defend their valuations.