Brand Value, Accounting Standards, and Mergers and Acquisitions: 'The Moribund Effect'

15 Pages Posted: 24 Apr 2018

See all articles by Roger Sinclair

Roger Sinclair

affiliation not provided to SSRN

Date Written: February 2017


“The Moribund Effect” is defined as an accounting phenomenon by which the value of a brand that is acquired, measured, and added to the balance sheet by a company remains unchanged no matter how well the brand might perform for that company over time. We describe accounting conventions for brands in mergers and acquisitions and explain the role of brand value. Our main contention is that the subsequent performance and value of an acquired brand should be reported annually in the Management Discussion and Analysis (MD&A) section of a company’s annual report. If the intangible asset value of the acquired brand has declined, an explanation should be provided to financial markets as to why this occurred. If there is a gain in asset value, it should be announced and explained to those same financial markets. We also review methodological issues in making such calculations, putting some emphasis on understanding the intangible value from brands and trademarks versus customer-related relationships, and we underscore the importance of marketing in guiding and driving these disclosures.

Keywords: brand value, brand equity, mergers and acquisitions, intangible asset value, accounting standards

Suggested Citation

Sinclair, Roger, Brand Value, Accounting Standards, and Mergers and Acquisitions: 'The Moribund Effect' (February 2017). Journal of Brand Management, Vol. 24, Issue 2, 2017. Available at SSRN: or

Roger Sinclair (Contact Author)

affiliation not provided to SSRN

No Address Available

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