Are the current reporting rules still fit for purpose?
Intangible assets are a vital asset for many companies. But the
practice of reporting one type of intangible assets, namely brands,
is muddled, illogical and needs reform. Some companies ignore
brands in their financial statements, others capitalise them and
some companies then confusingly report brands in different ways.
But just how should brands be reported fairly, meaningfully and
transparently?
Importance of Brands
The importance of brands and their subsequent loss in value has
been highlighted by Kraft Heinz. This US food giant has been rocked
by a colossal write-off of its brands. Indeed, for a company to
lose in total over $15 billion in just one financial year takes
real effort. But Kraft Heinz easily met the challenge. The troubled
food company, which has many leading branded food products,
recognised this enormous impairment charge for intangible assets
against earnings in its 2018 full year
