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If we should put Brand Asset on Balance Sheet Introduction "Brands are one of a companys important assets," says Jan Lindemann, Global Managing Director for Brand Valuation, Interbrand, arguably the leading brand consultancy firm which has undertaken many a famous valuation across the globe. According to the definition of brand and asset: “Brand is a name and/or symbol (a design, a trademark, a logo) used to uniquely identify the goods or services of a seller from those of its competitors, with a view to obtaining wealth in excess of obtainable without a brand. ... A companys "brand" is much more than its brand identity — not just a logo or a word mark, but the verbalized essence and visual embodiment of what the company stands for. As such, a coherent brand strategy makes for a healthy organization. ... There is a considerable amount of talk these days about "brand". For the accounting profession, valuation of a brand has been a source of intense debate. The central theme of this debate is whether to introduce the value of brands in the balance sheet. ... (Brand Finance Report, 1998) A second group believes that accounts should represent the fair value of brands in the balance sheet, regardless of whether it is an acquired brand or internally created brand. In my opinion, the brand has definite implications on the balance sheet. Although, putting a figure on a brand is imprecise, valuing them can help companies to incorporate that value in decision making. ... Financial managers should play a lead role in ensuring that such information about brand is adequately communicated to investors, because investors need and want greater disclosure of brand values. Theory In the UK, the debate regarding the inclusion of brands on the balance sheet has been resolved by FRS10, which state that any acquired brands should be now carried as intangible assets and amortized. ... An intangible item may be classed as an asset if access to future economic benefits that it represents is controlled by the reporting entity. ... The main features of the IAS 38 are: An intangible asset should be recognized initially at cost in the financial statements, if, and only if: (a) The asset meets the definition of an intangible asset. Particularly, there should be an identifiable asset that is controlled and clearly distinguishable from an enterprises goodwill; (b) It is probable that the future economic benefits that are attributable to the asset will flow to the enterprise; and (c) The cost of the asset can be measured reliably. This requirement applies whether an intangible asset is acquired externally or generated internally. ... However, some development expenditure may result in the recognition of an intangible asset. Why should we do Brand valuation? According to the “Brand finance report” (2001), 82% of analysts supported the assertion that acquired brands and other intangibles should be put onto the balance sheet whilst 56% felt that internally generated brands should also be included.