'Firms should stress brand value', says report

Companies should include an analysis of the value of their brands when compiling annual reports, new research claims.

Companies should include an analysis of the value of their brands when compiling annual reports, new research claims.

The survey, published by Brand Finance, urges publicly quoted firms to place greater stress on the value of their brands in financial reporting and to ensure that investors and analysts are kept aware of their marketing investments and the results they deliver.

Brand Finance surveyed 300 City analysts and almost 50 investor relations decision-makers at listed companies. According to the research, 78 per cent of analysts and 72 per cent of companies thought quoted firms should publish more information on brand values. A similar figure - 77 per cent - hought branding would become more important. Comparable figures for last year stood at just over 25 per cent.

The gap between the sum of a company's assets, as described on its balance sheet, and its market capitalisation is known by accountants as 'good will'. Brand Finance claims an increasing part of good will is contained in the value of a company's or its products' brand.

'There is a need to put brand values on the balance sheet,' said a spokesman for Brand Finance. 'If companies don't do that they should still talk to their investors about what is being done to protect the brand and where the investment goes,' he said.

The report also ranks the FTSE-350 companies according to a range of criteria identified as contributing to brand value. These include the CEO's ability to communicate the marketing strategy, having a clear annual report and a successful corporate brand.



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