Balance sheet brand valuation

Accounting standards now require buyers to recognise all identifiable assets which have been acquired at their fair values at the acquisition date, including intangible assets such as brands.

Our team has undertaken purchase price allocations for business combinations and brand impairment reviews for US, UK, Australian and New Zealand accounting purposes.

Valuations conducted by our consultants have also been approved for balance sheet inclusion by all of the 'Big 4' audit firms.

The evolution of accounting standards

Following the issue of International Financial Reporting Standard 3 (IFRS 3) in March 2004, it is now required that all business combinations be accounted for by applying the purchase method. This brings it in line with SFAS 141, the standard applicable for US accounting purposes.

Furthermore, the updated International Accounting Standard 36 (IAS 36) requires that annual impairment testing of any goodwill must be conducted every year, and it requires disclosure of the key assumptions used in the applied approach.

With brands often being the predominant component of goodwill these accounting changes have reinforced the need for specialist brand consulting to be involved in brand value reporting.