Brand is a topic that companies attach great importance to. Below I have compiled a paper on the problems and solutions to brand accounting for your reference only.

Paper abstract: Brand is an important intangible asset of an enterprise and an important part of its core competitiveness. In the era of knowledge economy, it plays a key role in the business plan and marketing decisions of enterprises. However, the current accounting standards do not involve the accounting of related costs. Although there are detailed provisions on the accounting method of trademark rights that are similar in concept to intangible assets, brands and trademarks seem to be the same, but in fact they belong to two different entities. concept. From the perspective of the long-term development of the enterprise, the company should pay more attention to the management and maintenance of the brand, so it is crucial to establish a brand cost accounting method. This article combines the brand life cycle theory in marketing, follows the life course of brand establishment, survival, and exit of the enterprise, uses historical cost measurement methods, and establishes a brand cost accounting system based on trademark right accounting.

Paper keywords: Brand, accounting, life cycle

Brand is different from trademark. Brand is a market concept, and trademark is a legal concept. If a brand wants to be viable, far-reaching, and big, it must be transformed into a trademark. Only by relying on the legal function of the trademark can it be sustained and the interests generated by the brand that exceed the value of the product itself can be protected.

Therefore, a brand is not born with it, but is attached to the trademark and carries out overall marketing planning for the products using the trademark, including researching the market, selecting target markets, specifying product strategies, price strategies, Distribution strategies and promotion strategies, and ensuring the effective implementation of these strategies are created. Therefore, the author believes that brand costs should be calculated on the basis of trademark rights accounting.

1. Overview of the accounting of trademark rights under the new accounting standards

(1) Initial measurement of trademark rights

The initial measurement of trademark rights is based on historical cost. in accordance with. According to the different acquisition methods, it is divided into the following accounting situations:

1. If it costs a lot to purchase someone else’s trademark, the purchase price, handling fees, etc. should be included in the purchase cost of the trademark as Intangible asset accounting.

2. If the company’s self-created trademark rights cost a lot and have a high profitability, all expenses incurred during the development process, including trademark design fees, registration fees, etc., will be listed as intangible assets. ; If the cost is not large, it does not need to be listed as intangible assets.

3. If the transferee wants to obtain a license, franchise certificate or franchise when enjoying the right to use the trademark of others, the one-time payment can be listed as intangible assets; If the contract stipulates that remuneration be paid to the transferor on a regular basis, the fee paid each time will be listed as management expenses.

4. The trademark rights transferred by investment should generally be recorded based on the registration certificate.

(2) Amortization and impairment of trademark rights

The amortization of trademark rights is the process of amortizing the value of a trademark into each beneficial period during its useful life. If the service life of the trademark right is determined, it should be amortized reasonably within the service life; the value of the trademark right with an indefinite service life will not be amortized, and an impairment test should be conducted on the balance sheet date, and the estimated recoverable amount If it is lower than the book value, an impairment provision will be made.

2. The current status and shortcomings of brand accounting

At present, brands have not yet been accounted for in our country. In foreign countries, the International Accounting Standards Committee has discussed whether brands can be recorded as Assets stipulate two conditions: first, the brand can bring huge economic benefits and promote enterprise development; second, the brand cost or value can be measured reliably.

In practice, these two standards are manifested in that only purchased brands are measured, and the purchase price is used as the value of the purchased brand; the value of self-created brands is not assessed on the grounds that the measurement technology is immature and violates traditional accounting principles. After accounting, the irrationality of doing so is reflected in the following two aspects:

First, brand value should not be generated during the transaction process.

A company only recognizes the value of acquired brands but not the value of its own brands. It seems that the brand value does not come from the initial creation process of the brand, but from the exchange process, which is unrealistic. We know that the value of goods is determined by the amount of various factors consumed in the production process, and as a brand that can bring super profits to the enterprise, why is its value generated when it is sold, not in the creation process? This kind of accounting method that ignores the law of value will inevitably weaken the active role of accounting in economic management.

Second, the price generated by a brand during the transaction process does not represent the true value of the brand. In market transactions, even if neither party can come up with a convincing evaluation conclusion on the value of a certain brand, once the transaction is completed, this brand value will be generated. We can define its value as a recognized value, but it is conceivable that if it changes The parties to the transaction and their conditions, the "recognized value" of the same brand value

will be very different, which shows that when a brand enters the market, for the buyer, the brand value can become its inclusion The valuation standard for asset items, but this price does not represent the value of the brand, but only represents the price paid by the company to obtain the right to use a certain brand. This accounting method distorts the acquisition price that reflects the value of a certain brand in reality. Accounting is really confusing.

3. Valuation basis of brand accounting

Brands are intangible assets of enterprises. In order to establish a brand accounting model, it is necessary to develop the principles of historical cost valuation of a unified accounting system. The historical cost valuation principle is a product of the industrial economy. It is determined by the characteristics of tangible assets. The business goal of enterprises is to maximize wealth, but people in different eras have different understandings of wealth. In the era of knowledge economy, enterprises use knowledge capital as the source of wealth increase. It can be seen that innovation serves as the driving force for their development. The proportion of intangible assets represented by knowledge in corporate assets has increased significantly. In some high-tech enterprises, the vast majority of assets are intangible Assets, and the valuation of intellectual capital, based on the historical cost valuation principle, may only be the price of a few books, or entrusted training fees and other provable actual expenditures spent to obtain knowledge, which will undoubtedly greatly distort knowledge. The value of capital, in fact, it is difficult to determine the historical cost when evaluating intellectual capital. To this end, it is necessary to change the current accounting measurement model in which historical cost dominates the world. For those assets and liabilities that cannot be measured or cannot be accurately measured using historical cost measurement principles, it is recommended to use fair value, current cost, market price, and realizable net present value. and other measurement modes.

IV. Suggestions for establishing a brand cost accounting system

(1) Selection of measurement attributes for brand accounting

The new accounting standards stipulate that the measurement attributes of accounting are mainly Including: historical cost, replacement cost, net realizable value, present value and fair value. Since brand cost accounting is established on the basis of trademark rights accounting, enterprises should continue to use historical cost measurement attributes.

(2) The significance and content of brand cost accounting

Any company that wants to gain consumer recognition for its products must consider converting trademarks into brands. Only by making them well-known The added value of a brand can continue to increase. Therefore, after establishing a trademark, companies usually invest a lot of financial, material and manpower in promoting and maintaining it, striving to establish a trustworthy brand image among consumers.

From this perspective, the company's continued investment in trademark rights can be seen as a process of building its own brand. Under the historical cost measurement model, the expenditure here should be included in the cost of creating the brand, so that it can effectively make up for the above mentioned costs. Describe the shortcomings of trademark right cost accounting. It can be seen that it is particularly necessary to establish a brand cost accounting system.

Analogous to the "Construction in Progress" accounting account in fixed assets, the company can set up the "Brand Under Construction" account. The debit side of the "Brand Under Construction" account reflects the initial cost of the trademark right and subsequent expenditures on the trademark. For example, publicity expenses such as advertising and promotions (in order to comply with the prudence principle of accounting information quality, they can be capitalized at a certain proportion, and the rest are expensed and included in sales expenses), and the lender reflects the cost when the brand matures. Since brands are also intangible assets, companies can also create a new secondary detailed account of "Brand" under the "Intangible Assets" account.

(3) Brand cost accounting method

The life cycle of a brand is the market life of the brand. After research and development, test marketing, and entering the market, the product gradually forms a certain influence and creates a brand; then, it grows step by step on this basis until the product finally falls out of favor in the market and the brand no longer has influence. Therefore, the brand life cycle can be divided into the brand's gestation period, infancy period, growth period, maturity period and decline period.

The author believes that the accounting of brand costs can, to a certain extent, make up for the shortcomings of the current accounting system in accounting for trademark rights in intangible assets. With the development of the economy and technological level, and the requirements of economic management, brand strategic management It will undoubtedly play a decisive role in the development of enterprises, so it needs to be continuously improved in practice and exploration to make its recognition and measurement both forward-looking and feasible.