The current financial reporting system features inconsistent rules that provide little information to investors about the value of marketing assets.
The International Organization of Standardization (ISO) is attempting to tackle this issue head on with the creation of a new global standard for regularly evaluating and reporting brand value.
In a recent Forbes article, Ivey's Associate Professor of Marketing Neil Bendle explains why these new reporting rules developed by the Marketing Accountability Standards Board are so important.
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“Financial statements cannot fairly represent the value of an enterprise if they don’t systematically include key intangibles like the brand or customer relationship values,” says Bendle. “Brand valuation has been a hodgepodge of rules inconsistently applied and reported. For example, based on current accounting rules, if we develop a brand ourselves it’s financially worthless. But if we purchased it from someone else it is valuable."
This new standard is intended to help management and investors develop a clearer picture of brand value and its overall importance.
