How is brand value calculated?

Brand value or brand valuation is an estimate of the total
value of the brand expressed in monetary terms. Companies adopt several different
methods to estimate the brand value. One way is to take brand value of the company as a
whole, in terms of its market capitalization, and subtract from this the value its
physical and other assets except the brands. The remainder is then considered to be
equal to the brand value. Another approach to calculate the brand value is to calculate
the present value of all the expected future profits of the company as its brand value.
For this purpose profit is taken as the net profit after providing for the nominal
interest on the net worth of the company.

Brand value at
product level may be calculated by comparing the market prices of the branded product
with comparable product without significant brand value, and then using this price
difference to calculate additional profits earned due to brand image of the product.
Calculating the present value of the stream of additional profits expected in future
gives the brand value.