
doi: 10.2139/ssrn.931023
After an empirical start, brand valuation has attracted the interest of both accounting practitioners and academicians. Several methods for the assessment of brand value have been developed. However, a major critique shared by these models has been the lack of objectivity. In view of such criticism, the Japanese Ministry of Economy, Trade and Labour created a dedicated Committee with the twofold task of rigorously defining brand and of developing a methodology for brand valuation based on publicly available balance sheet data. The result goes under the name of the Hirose methodology. The methodology, however, while achieving the above two mentioned key-merits, does not allow a financial interpretation of the valuation results. We propose a brand valuation model which merges objectivity with robust underlying quantitative structure thus sharing a direct financial interpretation and providing risk analysis insights. An empirical analysis allows us to compare both numerical results and financial insights derived by analysts from the utilization of the Hirose Methodology, the Royalty Method and the proposed model.
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