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Assisted an NGO in determining the fair value of its brand

Engagement: SKP was approached by a non-profit organisation formed with the objective of promoting poultry meat consumption and obtaining remunerative prices to farmers to determine the fair value of its brand that was to be exchanged on commercial terms.

Solution/Value Addition
To ascertain the value of the brand, our team considered several methodologies such as premium profit method, premium pricing method, royalty savings method, market approach method and cost-based approach. Based on the identified objectives and available information, SKP analysed historical information of amounts spent on advertising in the last five years and determined the value of the brand using the cost-based approach.

Further, based on management estimates, the advertising amount spent was apportioned into two broad categories – product promotion and brand building. The apportioned brand building expenses for the last five years were capitalised based on an estimated amortisable life of advertising expenses to determine the fair value of the brand. This ensured that the valuation carried out is not only commercially viable but also stands any legal scrutiny.