The reasons for the rapid growth of interest in brands are several. First, it came to be more generally recognised (though, it should be said, in a rather imperfect and ill-formed way) that certain businesses, which were not especially rich in tangible assets, were performing consistently and powerfully and seemed able to produce superior cash flows to, arguably, more ‘conventional’ companies. Such companies included businesses such as Apple Computer, Coca-Cola, Guinness and Unilever. Second, analysts and investors started to recognise that such businesses had an added, hidden dimension which set them apart from many others and which seemed to enable them to produce higher quality earnings. At this stage it was not widely recognised that the intangible factor present in such companies was ‘intellectual property’, mainly brands but also patents, copyrights and designs; nor was it widely recognised that ‘intellectual property’ (the term used by lawyers to describe such intangibles) or ‘intangible assets’ (the term used by accountants to describe the self-same assets) are a very specific type of asset which, in many respects, resemble tangible assets.
KeywordsCash Flow Balance Sheet Trade Mark Tangible Asset Corporate Brand
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