Brand

A brand is a rather nebulous concept because it can be extended to cover a lot of quite intangible and hard to assess benefits, that are nonetheless genuine.

In its narrowest sense, a brand is the identifying name and symbols of a product or a related group of products. This may be a company name, a trading name used by the company, or a name or symbol used to mark its products. The distinguishing names and symbols of a brand may be trademarked, and usually are.

The narrow definition of a brand can be extended to cover the public perception of a business and its products or services, it. This is where the definition becomes harder to pin down.

Even more difficult is the valuation of brands with a view to showing them as intangible assets on the balance sheet. This relies on techniques such estimating how much a brand will add to future cash flows and calculating a present value of these. The value of approaches such as this is questionable as they are on a wholly different basis to other assets shown on the balance sheet, and forecasting of cash flows is probably better left to analysts and investors.

Under IFRSs only acquired brands can be shown on the balance sheet. At least for these a price has been paid therefore a more certain valuation can be attached to them. In any case these are often amounts that would otherwise appear on the balance sheet in some other guise such as goodwill.