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The financial status with a brand becomes more distinguished as relations to consumers are built through the brand valuation. Recognizing the brand as an intangible asset becomes essential to a corporation because of the impact it has on consumer spending as well as on the financial future of a company. If finances begin to fluctuate from stable growth to increases and decreases in the company, then it can be noted as a direct link to the intangible asset of brand valuation (Wood, 662, 2000).
Branding is a concept that began centuries ago as many began to associate the idea of ownership with the products they owned. Branding a home or slaves was the concept used by those who were interested in keeping and maintaining a personal establishment. The main concept was to recognize ownership specifically to gather a return on investment for the ownership. The concept of branding for businesses began to boom with the emergence of the industrial revolution and the building of companies into national entities. During this time, the competition to create products at a mass level while outdoing competitors became the main concept. In the 1920s, General Motors, Ford and companies such as P&G began to use their name identity as a tactic for overcoming the competition. As these brands were identified as an intangible asset demand increased as well as the accounting structure. As consumerism began to rise in the 1980s, most businesses began to incorporate branding into their main identity as it was noted that financial differences occurred when a brand was recognized. The main concept was to create a higher amount of demand from potential customers while allowing customers to become loyal to the brand identity over other competitors. The result was the ability to not only build reputation, but also to change the financial increases within a corporation. The concept of brand identity during the 1980s and 1990s also began to emerge at a global level,
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Part I Accounting Standard AASB138 Intangible Assets Required 1 Briefly describe how AASB138 requires research and development expenditures to be accounted for. The first stipulation given by the AASB138 in reference to accounting for research and development is for amount involved in the said research and development program to be disclosed in an aggregate.
Bringing accounting policies to single standard has become a basis of free competition. When financial statements of every company is prepared in accordance to same standards, it easier for investors to analyse the current performance. With national markets merging into global, the number of companies operating internationally grows rapidly.
In essence, an intangible asset has the characteristics like ability of being separately recognized, ability to produce future benefits to the company and the use of the asset results in either reduction of costs or increase in revenues
There are various accounting standards that have evolved in the past and present to suit various businesses with regard to the treatment of intangible assets in accounting. The widely known GAAP or Generally Accepted Accounting
An intangible asset is, therefore, majorly a concept that can be turned into revenue. An intangible asset is thus identifiable only when it is separable in that it can be separated or sold, transferred, rented or exchanged
The different sorts of intangible assets encompass trademarks, goodwill, trade names, patents, organisational expenditures and franchises (Day, 2008). The various inherent characteristics of intangible assets can be identified in terms that it is noted to be non-scarce
adopting International Financial Reporting Standards, companies can present their financial reports on the similar basis as their overseas competitors, thus making comparisons simpler. Organizations with subsidiaries in nations that permit or require IFRS might be capable enough
include patents, copyrights, goodwill, reputation, and intellectual property while unlimited intangible assets include trademarks and business methodologies (Abdallah, 2004). Despite their nature, the assets are of significance to companies as they influence or contribute to
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