Amid the dynamics of a knowledge-based economy, intangible assets are increasingly playing a strategic role in determining a company’s value. Whereas investors historically focused on tangible assets such as real estate, machinery, or office inventory, attention is now shifting toward non-physical yet high-value assets, one of the most prominent being trademarks. A trademark is no longer merely a commercial identifier; it represents reputation, quality, and consumer trust, all of which can be capitalized into measurable economic value.

In modern business practice, a strong trademark can enhance a company’s competitiveness, expand market share, and attract investor interest. This has positioned trademarks as a key investment instrument of growing significance. Nevertheless, to be recognized as a credible investment asset, a trademark must meet measurable valuation standards and be supported by robust legal protection. This article examines how trademarks are positioned as intangible assets, the mechanisms for their valuation from both legal and business perspectives, and the importance of legal protection in fostering investor confidence.

Understanding Trademarks as Intangible Assets with Economic Value

Conceptually, a trademark constitutes a form of intellectual property with inherent economic value, as it is capable of generating future economic benefits. From an accounting perspective, the recognition of trademarks as intangible assets is governed by PSAK 19 on Intangible Assets, which provides that an asset may be recognized where it is capable of generating future economic benefits and can be reliably measured. Accordingly, a registered and developed trademark may be classified as an asset with measurable economic value.

Within the intellectual property regime, trademarks in Indonesia are governed by Law No. 20 of 2016 on Trademarks and Geographical Indications (“Trademark Law”). Article 1 paragraph (1) of the Trademark Law defines a trademark as any sign capable of being represented graphically to distinguish goods and/or services produced by a person or legal entity. This definition underscores that a trademark is not merely symbolic, but rather a legal identity intrinsically attached to business activities.

The economic value of a trademark becomes increasingly evident when it evolves into a well-known brand with strong consumer loyalty. Under such circumstances, a trademark may command premium pricing, enable licensing expansion, and serve as an object of commercialization, including franchising arrangements. As highlighted in various studies on the optimization of trademark economic value, trademarks can generate stable and sustainable cash flows, thereby qualifying as a viable investment instrument.

Furthermore, trademarks possess characteristics of transferable assets, capable of being assigned, licensed, or used as the subject matter of contractual arrangements. This is consistent with Article 41 of the Trademark Law, which provides that trademark rights may be transferred through inheritance, grants, wills, agreements, or other lawful means. This provision reinforces the position of trademarks as commercially tradable assets with economic value.

In practice, global corporations such as Apple, Coca-Cola, and Google demonstrate that brand value can surpass the value of a company’s tangible assets. This phenomenon is also emerging in Indonesia, where startups and small and medium enterprises (SMEs) are increasingly recognizing the importance of building trademarks as strategic assets. A clear understanding of trademarks as intangible assets is therefore fundamental to attracting investors.

Brand Valuation Mechanism from Legal and Business Perspectives

Despite the recognition of trademarks as intangible assets, a key challenge lies in determining their economic value objectively. Brand valuation refers to the process of assessing the financial value of a trademark based on various quantitative and qualitative approaches.

In business practice, there are three principal approaches to brand valuation:

Cost Approach: calculating the costs incurred in developing the trademark;
Market Approach: benchmarking against comparable trademark transactions in the market;
Income Approach: measuring the future cash flow potential generated by the trademark.

Among these, the income approach is the most widely used, as it reflects the actual economic value of a trademark based on its contribution to the company’s revenue. Investors generally favor this approach because it provides a projection of potential returns.

In Indonesia, the recognition of intellectual property as a legal asset has been further strengthened by Government Regulation No. 24 of 2022 on the Implementation of Law No. 24 of 2019 on the Creative Economy (“GR 24/2022”). Article 10 of GR 24/2022 stipulates that intellectual property may serve as collateral for debt financing, provided that:

the intellectual property has been duly recorded or registered with the competent authority; and
the intellectual property has been commercially managed, either independently or through assignment to another party.

Furthermore, Article 12 of GR 24/2022 provides that intellectual property-based financing may be facilitated through financial institutions, taking into account valuation results issued by certified appraisal institutions. This indicates that brand valuation is not merely an internal corporate necessity but also a formal instrument for accessing financing. Accordingly, brand valuation must be conducted in a professional and independent manner to ensure credibility in the eyes of investors. Appraisal institutions commonly apply international standards such as ISO 10668, which sets out comprehensive methodologies for brand valuation.

In addition to financial considerations, non-financial factors, such as brand strength, customer loyalty, and market perception, serve as critical variables in determining brand value. Trademarks with strong reputations and consistent branding are generally assigned higher valuations, as they are perceived to carry lower risk.

Trademark Protection as a Key Factor in Investor Confidence

Beyond valuation, legal protection constitutes a critical factor in establishing trademarks as investment assets. In the absence of adequate legal protection, brand value may be undermined by infringements such as counterfeiting, piracy, or unauthorized use. The Trademark Law provides a robust legal framework for the protection of trademark rights. Article 3 of the Trademark Law stipulates that trademark rights are acquired upon registration, reflecting the “first-to-file” principle, whereby the party that first registers the trademark obtains exclusive rights.

These exclusive rights include the right to use the trademark and to grant licenses to third parties. Article 83 paragraph (1) of the Trademark Law grants registered trademark owners the right to initiate legal proceedings against unauthorized users. This ensures legal certainty for investors, confirming that the asset in which they invest is duly protected.

Moreover, Article 100 of the Trademark Law imposes criminal sanctions, including imprisonment and/or fines, against parties infringing trademark rights. This demonstrates the state’s commitment to protecting trademarks as part of intellectual property rights.

From an investor’s perspective, strong legal protection significantly mitigates investment risk. Trademarks that are duly registered and supported by a proven track record of legal enforcement are more attractive, as they are perceived to offer stability and sustainability.

In the context of globalization, trademark protection is also closely linked to international expansion. Trademarks protected across multiple jurisdictions tend to command higher value due to their broader market potential. This aligns with the Madrid Protocol system, which facilitates international trademark registration.

In practice, many investors consider the legal status of trademarks as a key indicator during due diligence processes. Companies lacking adequate trademark protection are often viewed as high-risk due to their vulnerability to legal disputes. Accordingly, legal protection functions not only as a defensive mechanism but also as a strategic factor in enhancing brand value and attracting investment.***

Regulations:

Law No. 20 of 2016 on Trademarks and Geographical Indications (“Trademark Law”).
Government Regulation No. 24 of 2022 on the Implementation of Law No. 24 of 2019 on the Creative Economy (“GR 24/2022”).

Reference:

PSAK 19 Aset Takberwujud. Ikatan Akuntan Indonesia (IAI). (Accessed on 31 March 2026 at 10:01 WIB).
Susilowardani. Optimalisasi Nilai Ekonomi Hak Merek Menjadi Agunan Kredit di Bank (Kajian Kritis Peraturan Perundang-undangan di Bidang Hak Kekayaan Intelektual, Perbankan, dan Fidusia). Jurnal Repertorium (2014). (Accessed on 31 March 2026 at 10:23 WIB).
3 Main Approaches of Calculating Brand Value. Alami Sharia. (Accessed on 31 March 2026 at 10:44 WIB).
ISO 10668:2010 Brand Valuation — Requirements for Monetary Brand Valuation. ISO.org. (Accessed on 31 March 2026 at 10:20 WIB).

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Brand Valuation: Key Strategies to Attract Investors