How to Use Transfer Pricing to Calculate the Value of a Brand

Thu Dec 15 15:24:38 EST 2005
By Alexander Voegele, Dr. Stuart Harshbarger, and Nihan Mert-Beydilli

In this article from International Tax Review, NERA Special Consultant Dr. Alexander Voegele and Vice Presidents Dr. Stuart Harshbarger and Nihan Mert-Beydilli discuss the issues involved with determining the values of brands and calculating brand royalties. The authors note the unique particularities of brands, which may not be legally protected in many countries, and recommend the best approaches to calculating brand royalties, a process considered to be one of the most subjective tasks in the area of intellectual property valuation. The authors then suggest that one way to improve the process of brand valuation is to collect opinions from outside local experts, who are in the best position to assess the value of brands within the local marketplace, and to use this range of estimates as an impartial arm's length pricing mechanism.