Financial Valuation of Luxury Brands

Abstract

In the past, tangible assets (manufacturing assets, land, buildings and financial assets) were regarded as the main source of business value. However, economic and market conditions in the last quarter of the twentieth century have shown that a company’s value is not made up of its tangibles alone. Both markets and academia have recognized that intangibles are one of the main sources of value creation, and a factor in explaining the gap between some companies’ market and book (or accounting) values.