Part of the webinar series: Valuation 2021. A company’s name, logo and other intangible assets have no intrinsic value. Yet, such intellectual property (IP) rights are increasingly important. Other examples of such “soft” assets include trademarks, copyrights, and trade secrets. This webinar will help attendees understand how experts go about valuing such intangible assets.

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Practical and entertaining education for
attorneys, accountants, business owners and
executives, and investors.

3. Disclaimer
The material in this webinar is for informational purposes only. It should not be considered
legal, financial or other professional advice. You should consult with an attorney or other
appropriate professional to determine what may be best for your individual needs. While
Financial Poise™ takes reasonable steps to ensure that information it publishes is accurate,
Financial Poise™ makes no guaranty in this regard.
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5. Meet the Faculty
MODERATOR:
John Levitske - Ankura Consulting Group, LLC
PANELISTS:
Nene Glenn Gianfala - Chaffe & Associates, Inc.
John Fenn - Hilco Valuation Services
Prof. Jakki Mohr - University of Montana College of Business
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6. About This Webinar
Valuing Your Brand and Other “Soft” Assets
A company’s name, logo and other intangible assets have no intrinsic value. Yet, such
intellectual property (IP) rights are increasingly important. Other examples of such ―soft‖
assets include trademarks, copyrights, and trade secrets. This webinar will help attendees
understand how experts go about valuing such intangible assets.
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7. About This Series
Valuation 2021
What’s it worth? Whether you are engaged in the sale of an asset or attempting to recover damages in
litigation, valuations are often necessary for convincing the other side that your price is right. In
transactions, valuations assist parties in determining the price they are willing to pay or receive in the sale
of a security, business, or asset. In litigation, valuations play a critical role in setting a baseline for
damages awards. Expert assistance is required to accurately value many assets, whether it is a
business, a security, an intangible asset such as intellectual property or a brand, or lost profits in a
litigation context. Choosing the appropriate valuation expert can make or break your transaction or your
case, given the extensive battles between valuation experts that arise in contested matters. This series
provides an overview of valuation in its many contexts, from business valuations in transactions to battles
between valuation experts in all aspects of litigation.
Each Financial Poise Webinar is delivered in Plain English, understandable to investors, business owners, and
executives without much background in these areas, yet is of primary value to attorneys, accountants, and other
seasoned professionals. Each episode brings you into engaging, sometimes humorous, conversations designed to
entertain as it teaches. Each episode in the series is designed to be viewed independently of the other episodes so that
participants will enhance their knowledge of this area whether they attend one, some, or all episodes.
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8. Episodes in this Series
#1: What's it Worth? Valuing a Business for Sale
Premiere date: 2/3/21
#2: Valuing Lost Profits for Litigation Purposes
Premiere date: 3/3/21
#3: Selecting the Right Valuation Expert
Premiere date: 4/7/21
#4: Minority and Illiquidity Discounts
Premiere date: 5/5/21
#5: Valuing Your Brand and Other "Soft" Assets
Premiere date: 6/2/21
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9. Episode #5
Valuing Your Brand and Other “Soft” Assets
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10. Discussion Agenda
I. What Are the ―Soft‖ Assets of a Business?
II. The Value of ―Soft‖ Assets

11. What is a Brand?
• A brand is a set of symbols that summarize a company or product reputation in the
marketplace, encompassing the relationship the public has with the values and
aspirations of the firm.
• A brand is usually represented by assets that may be subject to copyrights or other
legal protection such as trade names, logos, trade dress, trademarks, internet
domain names, tag lines, jingles and other intangible assets
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12. What is a Brand?
• Intangible assets: nonphysical assets such as franchises, trademarks, patents,
copyrights, goodwill, equities, mineral rights, securities, and contracts (as
distinguished from physical assets) that grant rights and privileges and have value
for the owner
 International Glossary of Business Valuation Terms as agreed to by the
American Institute of Certified Public Accountants, American Society of
Appraisers, Canadian Institute of Chartered Business Valuators, National
Association of Certified Valuation Analysts, and The Institute of Business
Appraisers
• Thus, a brand is generally a group of assets that would be considered a subset of
intangible assets
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13. Types of Intangible Assets
• Intellectual Property
 Patents
 Trademarks
 Copyrights
 Trade secrets
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14. Types of Intangible Assets
• Intellectual assets
 Unregistered but codified
 Drawings
 Software
 Blueprints
 Documents
 Databases
 Formulas
 Recipes
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15. Types of Intangible Assets
• Intellectual capital
 Uncodified human and organizational capital
 Collective corporate knowledge
 Individual employee skills and knowledge
 Know How
 Organizational culture
 Customer satisfaction
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16. Accounting Standards Codification 805: Categories
of Identifiable Intangible Assets
• ASC 805-20-55 presents five categories of identifiable intangible
assets:
 Marketing-related intangible assets
 Customer-related intangible assets
 Artistic intangible assets
 Contract-related intangible assets
 Technology-related intangible assets
• According to ASC 805, goodwill is also an intangible asset, although
it is not an identifiable intangible asset
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17. Marketing-Related Intangible Assets
• Web page design and graphical artifacts; cover designs and mastheads
• Trademarks, service marks, trade names, collective marks, certification marks,
logos and proprietary fonts
• Trade dress
• Internet domain name
• Noncompetition agreements
• Marketing Segmentation, Targeting, and Scripts
• Active Prospect Lists
• Search engine, Yelp, NetPromoter, and other web rankings
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18. Customer-Related Intangible Assets
• Customer lists
• Customer contracts and related customer relationships
• Non-contractual customer relationships
• Order or production backlogs
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19. Artistic-Related Intangible Assets
• Plays, operas, ballets
• Books, magazines, newspaper, and other literary works
• Musical works such as compositions, song lyrics, and advertising jingles
• Photographs, drawings, and clip art
• Audiovisual material including motion pictures, music videos, television programs
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20. Contract-Related Intangible Assets
• License, royalty, standstill agreements
• Advertising contracts
• Lease agreements
• Construction permits
• Construction contracts
• Construction management, service, or supply contracts
• Broadcast rights
• Franchise rights
• Operating rights
• Use rights
• Servicing contracts
• Employment contracts
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21. Technology-Related Intangible Assets
• Patented or copyrighted software
• Design patents
• Mask works
• Unpatented technology and know-how
• Databases
• Trade secrets
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22. How Do Intangibles Create Value?
• Branding is a marketing strategy to build intangible assets that create a
differentiated name and image in the market that will attract and retain customers
• A brand and other intangible assets in general provide value through:
 Market advantage/power
o Premium pricing
o Reduced costs
o Increased market share
o Known reliability, quality and consistency
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23. How Do Intangibles Create Value?
• Defensive value/freedom to operate
 Defensive assets protect market share or pricing advantages
 Certain legally protected intangibles (i.e. intellectual property) create an
arsenal to discourage lawsuits by others or from utilizing information
 Hinder competition from branding efforts or differentiating product
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24. Purpose of Soft Asset Valuation
• Transaction advisory
 Sale/purchase, licensing, M&A, joint ventures, etc.
• Strategic decision-making (i.e., IP management)
 R&D planning, make v. buy, maintenance fees, etc.
• Tax regulation/planning
 Transfer pricing, creation of IP holding/management companies
• Financial reporting
 Purchase price allocation, value impairment
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25. Purpose of Soft Asset Valuation
• Financing (i.e., use of IP as collateral)
• Bankruptcy
• Litigation (i.e., direct and consequential damages)
• Regulatory and compliance requirements
• Others
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26. Generally Accepted Valuation Methods
• Cost approach methods
 Reproduction cost new less depreciation method
 Replacement cost new less depreciation method
 Trended historical cost less depreciation method
• Market approach methods
 Comparable uncontrolled transactions method
 Comparable profit margin method
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27. Generally Accepted Valuation Methods
• Income approach methods
 Relief from royalty method (cost savings)
 Differential income (with/without method)
 Profit split method
 Residual (excess earnings) method
• There are other unofficial methods that experts may resort to, such as
 ―Revealed Preference‖ with supporting surveys
 ―Counterfactuals‖ with supporting industry statistics
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28. Valuation Parameters
• Purpose of the valuation
• Standard of value
• Premise of value
• Valuation date
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29. Standard of Value
• The definition of value being utilized for a valuation
• Typically selected to match the purpose of the valuation
 Certain purposes require the use of a specific standard of value
• Three primary standards of value
 Fair market value/arm’s length standard – U.S. income, gift & estate tax
reporting
 Investment value (i.e., strategic value) – decision making
 Fair value – U.S. GAAP for financial reporting
• The same asset may have vastly different values under different standards of value
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30. Premise of Value
• Operational Premise:
 Going concern (value in-use) – assumes continued future use of the assets as
a group
 Liquidation (value in-exchange) – assumes sale of assets piecemeal
o Orderly (sold over a reasonably period of time)
o Forced (time-constrained – similar to auction; i.e., ―fire sale‖)
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31. Premise of Value
• Valuation Premise:
 Value in-exchange – the value of an asset of business interest assuming it will
be changing hands in a real or hypothetical sale
 Value to the holder – the value of an asset or business interest assuming it is
not being sold but instead is being maintained in its present form by its present
owners
• The same asset may have vastly different values under different premises of value
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32. Valuation Date
• All valuations only represent a snapshot in time and are performed as of a specific
date to be clearly identified for the user
• The value of the same asset can change from one date to another
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33. Comparing Business Valuation and Intangible Asset Valuation
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Business Valuation Intangible Asset Valuation
Valuation Approaches Income, Market and Cost Same, but methods may be different
Income subject to analysis All operating income of the
business
Portion of the operating income
Life of income projection Typically perpetuity Usually limited to remaining useful life
(RUL)
Discount/Cap Rates Usually lower Typically higher
Effect of obsolescence Assume business adapts (going
concern)
Assume effect on RUL
Transaction data More available Difficult to find

34. Comparing Business Valuation and Intangible Asset
Valuation
• Both business and asset valuation consider the same three approaches: income,
market, and cost
 However, the methods within each approach may be different
• Intangible asset valuation typically entails valuation of a single asset or small group
of assets rather than assembly of all assets necessary to operate a business
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35. Comparing Business Valuation and Intangible Asset
Valuation
• Assets involving assessing an incremental benefit stream – specific cash flows
attributed to intangible asset vs. total company available cash flow
• Business valuation typically assumes an indefinite life – i.e. perpetual returns from a
going concern, whereas most intangible assets are assumed to have a finite
life/diminishing returns.
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36. Comparing Business Valuation and Intangible Asset
Valuation
• The assessment and quantification of risk can vary significantly
 Finite life of assets
 Lack of fungibility – uniqueness of the asset to a specific business precludes it
from being redeployed in another business
 Intangible assets are less desirable as collateral
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37. Comparing Business Valuation and Intangible Asset
Valuation
• Market approach is more difficult to apply to intangible assets
 By definition, intangible assets are unique
 Lack of robust secondary market to observe arms-length trades – i.e. no stock
market
• Business valuation more often entails partial ownership partial ownership interests that
require a consideration of certain discounts and premia.
 Partial ownership of intangible assets is rare
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38. Identifying and Accounting for Risk in Intangible
Asset Valuation
• Types of risk
 Business risk
 Technology risk
 Legal / regulatory / compliance risk
• Methods to mitigate or manage risk
 Due diligence
 Pricing
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39. Identifying and Accounting for Risk in Intangible
Asset Valuation
• Methods for pricing risk and uncertainty
 Discounted cash flows – adjust discount rate for risk premiums
 Discounted cash flows – adjust cash flow projections
o Weighted range of scenarios (best, likely, worst)
o Decision tree – lattice models with discrete probabilistic outcomes
o Monte Carlo simulation – continuous probability distributions with a central
tendency and standard deviation
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40. About the Faculty
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41. About The Faculty
John Levitske - John.Levitske@Ankura.com
John Levitske, CPA/ABV/CFF/CGMA, ASA, CFA, CFLC, CIRA, MBA JD serves as a
business valuation, forensic accounting and damages expert witness, arbitrator, and advisor.
He provides business valuation, forensic accounting, purchase price analysis, damage
quantification, and dispute resolution services in complex commercial situations. He testifies
as an independent expert witness in disputes, both domestic litigation and international
arbitration, regarding issues of valuation, finance, accounting (e.g., GAAP) or damages. He
also acts as a neutral expert determiner or neutral arbitrator and advises clients in mediations
and negotiations. He is frequently consulted regarding business disputes, shareholder
disputes, M&A transaction disputes and bankruptcy.
To read more, go to https://www.financialpoise.com/webinar-faculty/john-levitske/
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42. About The Faculty
Nene Glenn Gianfala - nglenn@chaffe-associates.com
Ms. Gianfala is a Vice President of the Valuation Advisory group of Chaffe & Associates, Inc.
She is a Certified Public Accountant (CPA), Accredited in Business Valuations (ABV),
Certified in Entity and Intangible Valuations by the American Institute of Certified Public
Accountants (CEIV), and an Accredited Senior Appraiser in Business Valuations with a
specialty in Intangible Assets (ASA-BV/IA) by the American Society of Appraisers. Ms.
Gianfala performs intellectual property and intangible asset valuations for purchase price
allocations, impairment testing, internal intangible asset management, portfolio valuation and
litigation support. Ms. Gianfala provides business valuation services to public and private
companies for estate, gift and income tax planning, financial reporting, corporate planning,
business interruption claims, employee stock ownership plans and litigation.
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43. About The Faculty
John Fenn - jfenn@hilcoglobal.com
John Fenn is Senior Managing Director at Hilco Valuation Services, focused on business
valuation.
Corporate credit specialist with extensive experience in the debt capital markets, both sell
side and buy side – focused primarily in the leveraged finance arena. Have been an
Institutional Investor ranked Strategist, a reliable Desk Analyst across several Corporate
Credit Trading desks, a Portfolio Manager with Global High Yield experience, and a valuation
expert serving Alternative Investment managers. Hands-on, results-oriented manager with a
strong track record of building businesses, investment processes, and best-in-class teams.
Unique investment perspective comes from combining fundamental credit work on hundreds
of companies - including documentation and structuring - along with understanding of macro
trends and how they affect fair value and market performance. Have held Series 7, 63, and 24
licenses.
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44. About The Faculty
Prof. Jakki Mohr - jakki.mohr@umontana.edu
Dr. Jakki Mohr is the Regents Professor of Marketing, the Poe Family Distinguished Faculty Fellow, and Fellow, Institute
on Ecosystems, at the University of Montana. She received her Ph.D. in Marketing from the University of Wisconsin-
Madison. Prior to joining the University of Montana, Mohr was an assistant professor at the University of Colorado,
Boulder. Before that—some say, in another life--she worked in Silicon Valley at Hewlett-Packard (before it became
known as hp). Related to her participation in today’s Webinar, she taught a graduate seminar on Branding Strategy in a
Digital Era, and in 2017 published ―Marketers’ Valuation Approaches to Brand Equity: Insights for Accountants‖ in The
CPA Journal. Jakki studies challenges companies face in developing and commercializing break-through innovations,
including a broad range of technologies ranging from scientific innovations to innovations in restoration and ecology. She
served on the National Academies of Sciences Committee to overcome barriers to electric vehicle deployment in the
United States (2012-2015). Her recent research is situated at the intersection of the natural world and business. For
example, she studies the innovations in the field of ecological restoration (restoring degraded landscapes), how
companies use biomimicry (innovations inspired by nature, based on underlying biological mechanisms) to solve
technical and engineering challenges, and business valuations of natural capital. Her early research focused on
organizational communication between partners in strategic alliances/ partnerships in distribution channels.
Mohr's research has received national awards, and has appeared in Nature Reviews Genetics, Restoration Ecology, the
Journal of Marketing, the Strategic Management Journal, and the Journal of Public Policy and Marketing, among others.
She has also received numerous teaching awards.
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45. Questions or Comments?
If you have any questions about this webinar that you did not get to ask during the live
premiere, or if you are watching this webinar On Demand, please do not hesitate to email us
at info@financialpoise.com with any questions or comments you may have. Please include
the name of the webinar in your email and we will do our best to provide a timely response.
IMPORTANT NOTE: The material in this presentation is for general educational purposes
only. It has been prepared primarily for attorneys and accountants for use in the pursuit of
their continuing legal education and continuing professional education.
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46. About Financial Poise
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