The income approach values a brand as the present value of the future earnings that it is expected to generate over its remaining useful economic life. This is a commonly used approach to value businesses and other assets. Specific assumptions that require research and analysis include the brand’s current cash flows, forecast growth, the risk associated with future earnings, the brand’s useful economic life, and tax considerations.
The ISO Standard lists the following income based methods of determining the cash flow attributable to a brand.
Direct methods (primarily using revenue)
Indirect methods (primarily using profit)
