What are the ASBs views on putting brand names and other intangible assets on the balance sheet?
The ASB’s views on this question are set out in Appendix IV of FRS 10 ‘Goodwill and Intangible Assets’, which was issued in December 1997. The ASB thinks that brands, mastheads and many other intangible assets are actually similar in nature to goodwill and so should be accounted for in the same way as goodwill. FRS 10 allows goodwill to be capitalised only if it has been purchased (rather than generated internally). So it also allows most intangible assets to be capitalised only if they have been purchased. The ASB is aware that internally generated intangibles can be just as important to a business. But it does not believe that this in itself justifies putting such intangibles on the balance sheet, especially given the difficulties in arriving at a reliable value for them. Instead, the ASB has encouraged companies to discuss significant intangibles in the operating and financial review (OFR) that accompanies their financial statements. Many companies now do this, disclosing, for examp
