Measuring a Brand's Value -A Qualitative study of Media Groups

Abstract: Background and problem: Companies nowadays have recognized the importance of intangible asset e.g. brands and its effect on the financial statements. Brands are often hard to compute and is being measured slightly different in every company. Especially media groups with heavy acquisition need to put a lot of time and effort in measuring their newly purchased brands in order to establish trustworthy and accurate financial reports. Since the world is nowadays facing a more knowledge-based economy the importance of accurate measurements of of brands constantly increases. Purpose: The purpose with the thesis is to analyze how media groups measure new brands in their financial reports in connection to an acquisition. We will look further in how a media group with a high value of intangible assets uses the existing accounting standards and three accountancy firms state their expertise. Limitation: The thesis in only focusing on measurement of brands and we only contact Nordic situated media groups among the largest. Methodology: This thesis is conducted using a qualitative method and inductive approach. Scientific articles, journals, accounting data, literature and Internet sources compose the theoretical framework. The primary data was deducted through interviews with a person working in a media group and three respondents from large accountancy firms. The respondents were chosen due to their expertise in the field. Result and conclusion: After using a qualitative study our conclusion shows that the Relief from Royalty method is most frequently used independent of industry when measuring a brand. The ISO 10668 have unfortunately not have had a great impact on the industry in how the procedure of measure a brand is made. Suggestion for further research: We suggest further research on the Relief from Royalty method which was most widely used. It would be interesting to analysis the different components and how companies decide on the discount factor, royalty percentage and the growth rate.