powered by ip-valuation gmbh the world’s first trademark valuation software robert tafelmeier...

Powered by IP-Valuation GmbHPowered by IP-Valuation GmbH

The world’s first trademark valuation software

Robert Tafelmeier

IP-Valuation GmbH

The Value of Trademarks - How to manage and measure

Copenhagen, Denmark, 7 June 2007

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Table of Contents

1.1. IntroductionIntroduction

2.2.

3.3.

Advantages of IP-ValuationAdvantages of IP-Valuation

4.4.

Structure of the Valuation MethodStructure of the Valuation Method

Trademark Valuation SoftwareTrademark Valuation Software

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IP-Valuation GmbH

• IP-Valuation GmbH is a business consulting firm specializing in the fields of trademark valuation and trademark accounting • August 2003: Start of research project „Trademark Valuation“ together with partner companies

• September 2005: Foundation of IP-Valuation GmbH

• Combination of expertise in the field of trademark valuation and trademark accounting with IT know-how at the highest level.

• Business segments: Consulting services and trademark valuation software

Introduction

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• Purchase or sale of trademarks

• Mergers & Acquisitions

• In-house reporting

• Loan security (Basel II)

• Calculation of royalty rates for trademarks

• Accounting for acquired trademarks (from 2005 in the EU: consolidated financial statements have to be in accordance with IAS/IFRS)

Annual impairment test for balanced trademarks Accounting for trademarks after mergers & acquisitions

Trademark Valuation - Reasons

Introduction

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Table of Contents


2.2.

3.3.


4.4.



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Advantages

• The worldwide first trademark valuation software

• Flexible and independent trademark valuation on a 24/7 basis

• High degree of objectivity and standardization

• Confidential company data are not released

• Cost-efficient

• Access to numerous data bases (e.g., data for more than 1,000 peer groups)

• Accounting standards fully complied with (US-GAAP and IAS/IFRS)

2. Advantages of IP-Valuation

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IFRS-Certificate of Prof. Dr. Claus-Peter Weber*

Extract from Prof. Dr. Claus-Peter Weber‘s report:

„IP-Valuation GmbH’s trademark valuation method „BrandValue” is a very good methodfor determining trademark value for all kinds of financial valuation purposes.“

"The trademark valuation method designed by IP-Valuation GmbH is, as a market-oriented valuation, a suitable and accurate method of carrying out a fair value acquisition-valuation of trademarks in accordance with IAS 38 and IFRS 3."

"For the subsequent valuation the trademark valuation method is, as a market-oriented valuation, a suitable way of calculating the fair value for the prescribed impairment test in accordance with IAS 36."

* Member of the German Accounting Standards Board; Institute of Accountancy at the University of Saarbrücken


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TÜV-Certificate according to ISO-Standard

TÜV Product Service GmbHTÜV SÜD Group

The trademark valuation software „BrandValue“ is certified according to the ISO-Standard:

ISO / IEC 12119: „Information technology – Software packages – Quality requirements and testing“


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Table of Contents


2.2.

3.3.


4.4.



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Cost ApproachMarket Approach Income Approach

Market Prices (active

markets)

Analogy Methods

Relief from

Royalty

Premium-Profit

Method

Profit-Split

Methods

Method of Historical

Costs

Recreation Costs

Trademark Valuation Methods

3. Structure of the Valuation Method

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Market-orientedTrademark Value


Company-orientedTrademark Value


Present value oftrademark-derived

earnings(Market-View)

Protection value (Market-View)

Protection value(Comp.-View)


earnings(Company-View)


Two ways of valuating trademarks

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• Perspective of an external buyer who buys only the trademark and no other assets like real estate, production facilities, etc.

• Based on peer group data

• The protection value of the trademark is the sum of current fees charged by offices and lawyers for the registration of the trademark

Reasons: Purchase or sale of trademarks, Fair Value (US-GAAP und IAS/IFRS),

etc.



earnings(Market-View)

Protection value (Market-View)



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• Determines the value of trademarks to owners

• Based on owner-specific cost and capital structures

• The protection value of the trademark is the sum of current fees charged by offices and lawyers for the registration of the trademark

Reasons: Internal trademark reporting, management of trademarks, etc.



earnings(Company-View)

Protection value(Comp.-View)



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Segment CSegment B

Segment A Year 1 Year 2 Year 3 Year 4 - ?+

TrademarkEarnings

Trademark Discount Rate

Present Value of Trademark Earnings

Protection Value of the Trademark

Trademark Value

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Calculation of the Trademark Value - Overview


TrademarkEarnings

TrademarkEarnings

TrademarkEarnings

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Calculation of Trademark Earnings

Trademark revenues (branded sales)

Operating profit after taxes Residual

earnings Trademark x EBITA- earnings Margin - (Capital x

x (1-t) WACC) x STC

STC = Specific Trademark Contribution

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Table of Contents


2.2.

3.3.


4.4.



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Software for Financial Trademark Valuation

• Worldwide first software for financial trademark valuation

• Periodical updates for provided data bases

• Installation of the software at the customer‘s workstation or the customer gets an individual online login

4. Trademark Valuation Software

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4. Trademark Valuation Software

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