Accountants to give green light to brands

Marketing departments will become more accountable for the real value of their brands, following a decision by the accountancy profession to recognise the value of acquired brands on company balance sheets.

The profession has resisted attempts to allow intangible assets such as brands, licences and patents to be counted separately on balance sheets.

But now the Accounting Standards Board, which represents the whole industry, has published a discussion paper tacitly accepting the principle.

Previously all intangibles were included as “goodwill” during an acquisition. The new position would split “goodwill” three ways: intangible assets with a finite life, depreciated over a period of up to 20 years; the more nebulous goodwill; and intangibles with an infinite life that would have to be re-evaluated annually. Brands would be defined as intangibles – putting more pressure on marketing departments to perform.

Raymond Perrier, brand evaluation director at Interbrand, argues: “It gives a company the freedom to spend money and get a return on it. It keeps the notion of brands at the front of the mind and makes companies more accountable to shareholders.

“Marketing departments will have to take a long-term view of the brand and its value.”

The shift at the ASB covers acquired but not created brands, so the recently purchased Colman’s would be on Unilever’s balance sheet, but Persil would not. However, pressure will mount for all brands to be included.

Latest from Marketing Week

PLEASE SIGN IN OR REGISTER. IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and inspiration that will help you develop as a marketer and leader.

Register and receive the best content from the only title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work, so we can make Marketing Week more relevant to you.

Register now

THE BEST CONTENT

Our award winning editorial team and columnists will ask the biggest questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we will be your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Dedicated to developing your skills and helping you achieve marketing excellence. Find guidance on leadership, professional development and the latest industry jobs.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here