Financial Information and Brand Value

2Brand Development

The goal of this chapter is threefold: understanding the definition of an asset, its role and its importance. We will clarify this notion of “assets” and present the modalities of classification and recognition of it. This study of the concept of assets will allow us to make the link with one of its components that holds our attention: the brand.

Intangible assets ensure a predominant position in the presentation of financial statements. The reasons are simple; in fact, developing intangible assets helps generate profit. Moreover, business development also involves the development of intangible assets such as brands, which prove to be a necessary tool for the development of companies’ activities.

These observations lead us to make a link between the valuation of intangible assets, the valuation of the brand and the accounting information related to intangible items.

Then, we will identify the variables essential to the understanding of brand equity. We understand the monetarization of brands and the need to value them.

Managers increasingly understand the difference between the accounting value of brands and the financial value of brands. They are aware of the importance of brand valuation, which implies the need to understand the methods of brand valuation in a relevant way. We are therefore committed to detailing the objective valuation methods and presenting the main methods of brand valuation.

2.1. The brand, an intangible asset

2.1.1. The growing role ...