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Expensing of a Rebranding Initiative

accounting for rebranding costsMy company has recently gone through a re-branding initiative for one of our divisions. We spent a lot of money on a new logo, slogan and various other design items. The benefit of all this money spent will be seen in 2014 and beyond. There's no benefit at all in 2013. Should this expenditure be expensed in 2013 or can it be capitalized and spread out over 2 or 3 years. Or, should it just be expensed in 2014 to better match revenue and expenses?


Topic Expert
Patrick Dunne
Title: Chief Financial Officer
Company: Milk Source
(Chief Financial Officer, Milk Source) |

The following is from IAS 38:
Initial recognition: internally generated brands, mastheads, titles, lists
Brands, mastheads, publishing titles, customer lists and items similar in substance that are internally generated should not be recognized as assets. [IAS 38.63]

And the link to read more:

I have never seen brands capitalized unless through a company acquisition

(Controller) |

After reading that I would determine that it should not be put on the balance sheet and amoritized as an intangible asset, but it should still get expensed in 2014 to match revenues and expenses.

Topic Expert
Karoline Mello
Title: Director, FP&A
Company: Apollo Group
(Director, FP&A, Apollo Group) |

While I understand you view this as an investment in future revenue generation, branding is not considered property or asset - and should be expensed as incurred.


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