How is a brand or trademark valued?

Brand and trademark valuation most commonly applies the relief-from-royalty method — estimating the hypothetical royalty an owner would pay to license the brand if they did not own it, discounted to present value using an appropriate discount rate. The multi-period excess earnings method (MEEM) is also used where the brand is the primary value driver. Market-based approaches referencing comparable brand transactions can supplement these income-based methods.

When is a goodwill impairment test required under IAS 36?

Under IAS 36, goodwill acquired in a business combination must be tested for impairment annually, regardless of whether there are any indicators of impairment. Goodwill is allocated to cash-generating units (CGUs) and the recoverable amount of each CGU is compared to its carrying amount. Recoverable amount is the higher of fair value less costs of disposal and value in use. An impairment loss is recognised when the carrying amount exceeds the recoverable amount.

Intangible Asset Valuation Services

Overview

Intangible Assets Drive Most of Today's Business Value

In today's knowledge economy, intangible assets account for the majority of enterprise value across technology, pharmaceutical, media, consumer goods and sports industries. At Shasat, we deliver precise, independent valuations of intellectual property, brands, patents, trademarks, goodwill and other intangible assets — supporting financial reporting, transactions, tax planning, litigation and strategic decision-making.

Intangible asset valuations are required at acquisition (IFRS 3 purchase price allocation), on an ongoing basis for impairment testing (IAS 36), for financial reporting disclosures (IFRS 13 Level 3), for licensing and commercialisation transactions, for regulatory and tax purposes, and in legal disputes. Each context demands different methodology, evidential standards and levels of documentation.

Sector expertise

Valuing what matters most in high-intangible sectors

Technology and SaaS

Pharmaceuticals and Biotech

Sports Franchises and Clubs

Media and Broadcasting

Consumer Brands and Retail

Private Equity and Venture Capital

Financial Services and Fintech

Oil, Gas and Energy

What we value

Categories of Intangible Assets

IFRS 3 requires the separate identification and fair valuation of all intangible assets acquired in a business combination. IAS 38 classifies intangibles as marketing-related, customer-related, artistic, contract-based or technology-based. Shasat values assets across all five categories and beyond.

Brands and Trademarks

Brand value, brand equity, trade names, logos, domain names, newspaper mastheads and social media presence. Valued using the relief-from-royalty method or multi-period excess earnings method.

IAS 38 · IFRS 13 · IVSC

Patents and Intellectual Property

Patented and unpatented technology, trade secrets, formulas, recipes, manufacturing processes and know-how. Relief-from-royalty and multi-period excess earnings approaches applied based on commercialisation stage.

IAS 38 · IFRS 3 · IVSC

Customer Relationships and Contracts

Customer lists, customer relationships, non-contractual customer relationships, order backlog and customer contracts. Multi-period excess earnings method applied to isolate the value attributable to the customer relationship.

IFRS 3 · IAS 38 · IVSC

Technology Platforms and Software

Developed technology, proprietary software, algorithms, SaaS platforms, databases, AI models and digital infrastructure. Valued using the cost approach (replacement cost), income approach or technology-specific royalty models.

IAS 38 · IFRS 13 · ASC 350

Sports Franchise and Media Rights

Sports club franchise rights, broadcasting rights, media rights, stadium naming rights, sponsorship contracts and athlete image rights. Income-based approaches using projected revenue streams and contractual terms.

IFRS 13 · IAS 38 · IVSC

In-Process R&D (IPR&D)

Research and development projects in progress at an acquisition date — recognised separately from goodwill under IFRS 3 at fair value. Multi-period excess earnings method adjusted for probability of technical and commercial success.

IFRS 3 · IAS 38 · ASC 805

Goodwill and Impairment Testing

Annual goodwill impairment testing under IAS 36 — CGU identification, recoverable amount determination (value in use or fair value less costs of disposal), and disclosure of key assumptions and sensitivities.

IAS 36 · IFRS 13 · ASC 350

Licences, Franchises and Concessions

Operating licences, franchise agreements, broadcast licences, spectrum rights and government concession agreements. Valued using the income approach, with the with-and-without method applied to isolate the licence's incremental contribution.

IAS 38 · IFRS 3 · IVSC

Sector focus

Deep Sector Expertise

Intangible asset valuation is highly sector-specific. The relevant intangibles, appropriate methodology and key value drivers differ materially between a pharmaceutical company, a sports club and a technology platform.

Sports Franchises and Clubs

Franchise rights, broadcast deals and commercial value

Sports clubs and franchise holders carry significant intangible value in the form of league participation rights, broadcasting contracts, naming rights, sponsorship portfolios, athlete image rights, stadium branding and global fan base equity. These intangibles often represent the majority of a sports club's enterprise value and require specialist income-based valuation using contractual cash flow projections.

League and franchise participation rights — income approach based on expected broadcast and commercial revenues

Broadcasting rights — contractual cash flow projections over remaining term with renewal probability adjustment

Naming rights and sponsorship contracts — with-and-without and income approaches

Athlete image rights and personal brand value — relief-from-royalty applied to endorsement revenues

Brand and fan base equity — relief-from-royalty benchmarked against comparable sports brand transactions

Relevant standards

IFRS 13 — fair value measurement

IAS 38 — intangible asset recognition

IFRS 3 — business combination PPA

IAS 36 — impairment testing

IVSC — valuation methodology

Technology Companies and SaaS Platforms

Software, algorithms, data and platform value

Technology companies often carry the majority of their value in intangible form — proprietary software platforms, algorithms, AI models, databases, domain names and customer relationships. These require income-based or cost-based valuation approaches, with careful treatment of useful life, obsolescence and the distinction between maintenance and enhancement costs under IAS 38.

Proprietary software and SaaS platforms — replacement cost or income approach based on projected recurring revenue

Algorithms and AI models — cost approach (reproduction cost) with income validation

Customer relationships and SaaS ARR — multi-period excess earnings applied to contracted and recurring revenue base

Technology patents and trade secrets — relief-from-royalty based on third-party licensing market

Databases and structured data assets — cost and income approaches with data exclusivity adjustment

Relevant standards

IAS 38 — software capitalisation rules

IFRS 3 — PPA on tech acquisitions

ASC 350 — US GAAP intangibles

IFRS 13 — Level 3 fair value

IVSC — technology asset guidance

Pharmaceuticals and Biotechnology

Patents, licences and in-process R&D

Pharmaceutical and biotech companies derive value primarily from drug patents, regulatory approval rights, development pipelines and licensing agreements. In-process R&D (IPR&D) must be recognised separately from goodwill under IFRS 3, requiring probability-weighted valuation of pipeline assets at different stages — from pre-clinical through Phase I, II, III and regulatory approval.

Drug patents — relief-from-royalty using market royalty rates for comparable therapeutic classes and remaining patent life

In-process R&D — multi-period excess earnings adjusted for clinical trial success probability at each development stage

Regulatory approval rights and marketing exclusivity — income approach over exclusivity period

Licensing agreements and royalty streams — discounted cash flow over contractual term with probability weighting

Trademarked drug names — relief-from-royalty benchmarked against pharma brand transaction data

Relevant standards

IFRS 3 — IPR&D recognition

IAS 38 — R&D capitalisation criteria

IAS 36 — pipeline impairment

ASC 805 — US GAAP IPR&D

IVSC — bioscience asset guidance

Media, Broadcasting and Entertainment

Rights, licences and content libraries

Media and entertainment companies hold significant intangible value in broadcasting licences, content libraries, distribution rights, publishing rights, music catalogues and subscriber relationships. Rights agreements are typically finite in duration, requiring income-based valuation over the contractual period with renewal probability assessments.

Broadcasting and spectrum licences — income approach based on expected advertising and subscription revenues

Content libraries and film catalogues — discounted cash flow over remaining exploitation life

Music catalogues and publishing rights — relief-from-royalty based on streaming and licensing market rates

Subscriber relationships — multi-period excess earnings applied to subscriber churn-adjusted revenue projections

Distribution agreements — with-and-without method isolating value of exclusive distribution rights

Relevant standards

IFRS 13 — fair value framework

IAS 38 — content asset recognition

IFRS 3 — media M&A PPA

IAS 36 — licence impairment

IVSC — intangible asset standards

Consumer Brands and Retail

Brand equity, trade names and customer loyalty

Consumer goods companies and retailers typically carry significant brand value, customer loyalty assets and franchise system value. Brand valuation is most critical in M&A transactions, licence structuring, tax planning for cross-border royalty flows, and annual impairment testing under IAS 36. Shasat values consumer brands using relief-from-royalty, excess earnings and market-based approaches.

Brand and trade name value — relief-from-royalty method using market royalty benchmarks by sector and brand strength

Customer loyalty programmes — multi-period excess earnings applied to loyal customer base revenue

Franchise system value — income approach over franchise network contribution period

Retail locations and lease-related intangibles — above-market lease value and favourable lease agreements

Defensive brand value — assessment of the value in preventing competitors from using the brand

Relevant standards

IAS 38 — brand recognition criteria

IFRS 13 — Level 3 brand valuation

IFRS 3 — PPA on consumer M&A

IAS 36 — brand impairment

IVSC IVS 210 — intangible assets

Methodology

Intangible Asset Valuation Methods

Shasat selects the most appropriate method based on the nature of the intangible asset, available market data and the purpose of the valuation. IVSC IVS 210 and IFRS 13 recognise income, market and cost approaches as the three accepted frameworks.

01

Income Approach

Converts expected future economic benefits from the intangible into a present value. The primary approach for most intangibles with identifiable cash flows.

Relief-from-royalty method

Multi-period excess earnings (MEEM)

With-and-without method

Discounted cash flow

Greenfield / incremental income

02

Market Approach

Uses prices and terms from comparable market transactions to benchmark the value of the intangible asset. Applied where sufficient comparable data exists.

Comparable licence transaction analysis

Comparable M&A transaction multiples

Royalty rate benchmarking

Industry-specific pricing multiples

03

Cost Approach

Reflects the amount required to recreate or replace the intangible asset. Applied where income and market approaches are less reliable — typically software, databases and internally developed technology.

Reproduction cost (identical replica)

Replacement cost (equivalent utility)

Obsolescence adjustments

Trended historical cost method

Use cases

When Intangible Valuations Are Required

IFRS 3 Purchase Price Allocation

Post-acquisition identification and valuation of all intangible assets at fair value

IAS 36 Impairment Testing

Annual goodwill impairment and triggered reviews for intangibles with indefinite lives

Mergers and Acquisitions

Buy-side and sell-side IP and brand valuation for transaction pricing and due diligence

Tax and Transfer Pricing

IP holding structures, royalty rate determination and intercompany IP transactions

Funding Rounds and IPO

Investor-grade IP and brand valuations for Series funding, IPO and capital markets

Licensing and Commercialisation

IP and brand valuation for licensing deal structuring, royalty rate negotiation

Dispute Resolution and Litigation

Expert witness IP and brand valuations for damages claims and court proceedings

Collateral and Insurance

IP asset appraisal for use as collateral, insurance coverage and risk management

Standards applied

Accounting and Valuation Frameworks

IFRS 13 IFRS

IAS 38 IFRS

IAS 36 IFRS

IFRS 3 IFRS

IFRS 16 IFRS

ASC 820 US GAAP

ASC 350 US GAAP

ASC 805 US GAAP

IPSAS 31 IPSAS

IVSC IVS 210 IVSC

FAQs

Common Questions

The primary IFRS standards are IAS 38 (Intangible Assets), which governs initial recognition, subsequent measurement and amortisation; IAS 36 (Impairment of Assets), which requires annual impairment testing for goodwill and intangibles with indefinite useful lives; IFRS 3 (Business Combinations), which requires purchase price allocation at fair value; and IFRS 13 (Fair Value Measurement), which defines the measurement framework. US GAAP equivalents are ASC 350, ASC 805 and ASC 820. IVSC IVS 210 provides the global methodology framework for intangible asset valuation.

Brand and trademark valuation most commonly applies the relief-from-royalty method — estimating the hypothetical royalty an owner would pay to license the brand if they did not own it, discounted to present value at an appropriate discount rate. This rate reflects the royalty rates observed in comparable brand licensing transactions for the sector and brand strength tier. The multi-period excess earnings method is applied where the brand is the primary value driver of the business. Market-based approaches referencing comparable brand transactions can supplement these income-based methods.

Sports franchise rights and media rights are typically valued using the income approach — specifically the multi-period excess earnings method or the with-and-without method, which estimates the incremental cash flow attributable to the right compared to a hypothetical scenario without it. Key inputs include broadcast revenue, gate receipts, commercial income, sponsorship contracts, brand strength and the remaining term or renewal probability of the rights agreement. Shasat has specific experience in sports sector intangible valuations across European football clubs, franchise sports organisations and broadcasting rights holders.

In-process research and development (IPR&D) refers to R&D projects in progress at the acquisition date in a business combination. Under IFRS 3, IPR&D must be recognised separately from goodwill at fair value if it meets the definition of an intangible asset. It is typically valued using the multi-period excess earnings method, adjusting cash flow projections for the probability of technical and commercial success and the stage of completion at the valuation date. For pharmaceutical assets, probability of success rates are calibrated by clinical phase and therapeutic area.

Under IAS 36, goodwill acquired in a business combination must be tested for impairment annually regardless of whether there are any indicators of impairment. Goodwill is allocated to cash-generating units (CGUs) or groups of CGUs and the recoverable amount of each CGU is compared to its carrying amount. Recoverable amount is the higher of fair value less costs of disposal and value in use. An impairment loss is recognised when the carrying amount exceeds the recoverable amount and cannot be reversed in subsequent periods.

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