| Author: | Foster, G. |
| Title: | There's no accounting for brands |
| Journal: | Management Today
1989 : OCT, p. 90-96 |
| Index terms: | CONSUMER GOODS INDUSTRIES PROFITABILITY FINANCIAL PERFORMANCE ASSET VALUATION BRANDS GOODWILL ACCOUNTING |
| Language: | eng |
| Abstract: | Companies in consumer goods industries insist on putting the value of their brands in their balance sheets. This has brought about a chaotic situation in the presentation of accounts. Because of a rising market, prices paid bear no relation to balance sheet figures. The businessman wants to know why, when his company is growing in profitability, but the published figures fail to reflect it. A solution is to subtract "identifiable intangibles" from the sum of goodwill, and enter these separately in the balance sheet. This avoids the problem of write-off. According to London Business School there is the difficulty of deciding what the valuation represents, i.e. how far a brand can be distinguished from other aspects of the business. |
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