Valuing an intangible asset. Valuation of a brand name. Zara´s brand as an example

Abstract

The crisis has provoked an increase of company investments in intangible assets as the result of reaching new forms of growth. Consequently, firm’s value relies decisively on the valuation of these assets, which constitute an even greater appreciation combined to other production agents. However, traditional models and understanding of enterprise value undermines these assets that usually are left without being taken into account. The objective of this paper is to establish a clear path to study intangible assets, focusing on the different methodologies employed to assess the value of firm brand names. Further, it will summarize the main ways to analyze an intangible asset with a focus on valuing brand names of firms, centering later on the valuation of Zara’s brand as an example. Lastly a model is proposed to evaluate the value of Zara as a brand name.