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Series Editor Régine Teulier
Financial Information and Brand Value
Reflections, Challenges and Limitations
Yves-Alain Ach
Sandra Rmadi-Saïd
First published 2020 in Great Britain and the United States by ISTE Ltd and John Wiley & Sons, Inc.
Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licenses issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned address:
ISTE Ltd
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UK
www.iste.co.uk
John Wiley & Sons, Inc.
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Hoboken, NJ 07030
USA
www.wiley.com
© ISTE Ltd 2020
The rights of Yves-Alain Ach and Sandra Rmadi-Saïd to be identified as the author of this work have been asserted by them in accordance with the Copyright, Designs and Patents Act 1988.
Library of Congress Control Number: 2020943918
British Library Cataloguing-in-Publication Data
A CIP record for this book is available from the British Library
ISBN 978-1-78630-567-1
Introduction
For many years now, brands have become increasingly important in the lives of companies. Yet nothing is more difficult than defining what a brand is, as there are so many different aspects to the concept. The brand is a company’s most important asset. It enables it to build up a customer base, to develop customer loyalty and to promote the distribution of products, by means of a distinctive sign capable of reaching the consumer. Brands can be found everywhere and become an integral part of our living environment.
Brand valuation requires knowledge of the legal, commercial, marketing, accounting, financial and tax environment surrounding them. These elements cannot be taken into account individually, unless a partial and inaccurate estimate is made.
Perceived by investors as a source of value, the brand is, however, not always recognized as a company asset. Indeed, faced with the non-recognition of internally generated brands as an asset, from an accounting perspective, companies resort to the dissemination of additional information as an alternative to inform investors about the value of these intangible assets. This difference in the accounting recognition of brands, depending on whether they are acquired or internally generated, is not accurately reflected in the company’s assets and liabilities and visible to its stakeholders, particularly to investors.
As a result, the financial statements relating to brands provide little information on these items. With this in mind, companies are led to propose a global offer of standardized and voluntary information in their annual reports with regard to the valuation of the brands they own and operate.