Brand-based financing: Assessing the financial relevance and disclosure effects of brand value

Authors: Giuseppe Sorrentino, Mario Situm, Helmut Pernsteiner
Cited by: 0

Abstract

Intangible assets have become central drivers of corporate value creation, yet internally generated brands remain invisible in financial reporting, raising the question of whether monetary brand values can function as credible financial assets. This gap is notable given that brands constitute a substantial share of firm value but are excluded from balance sheets under current regulations. This paper examines whether - and under which conditions - brands can be utilized as financeable assets, with a focus on the consumer goods sector. A standardized online survey among 104 auditors and tax advisors in Germany and Austria assessed four real cases of brand-based financing - IP spin-offs with re-licensing, brand pledges for loans or bonds, and sale-and-license-back structures - and captured perceptions of brand value relevance, enterprise value share, and the usefulness of brand value disclosure. Practitioners estimate that brands account for roughly 47% of enterprise value and generally view the examined financing structures as feasible and economically sound. The strongest driver of positive evaluations is the belief that disclosing monetary brand values provides a more accurate and transparent representation of a firm’s financial position, indicating that brand value transparency acts as a credibility-enhancing signal that reduces information asymmetry, even though its perceived investor impact varies by context. Overall, the study shows that monetary brand values can be translated into effective financing instruments when credibly valued, transparently disclosed, and strategically structured. Suitable mechanisms depend on the objective - liquidity generation (sale-and-license-back), collateralization (pledges or securitized bonds), or governance-oriented solutions (IP subsidiaries). The findings underline the financial relevance and potential of brands while acknowledging that the expert sample and the scenario-based design restrict the extent to which the results can be transferred to other financing contexts, given the inherently case-specific nature of brand-based financing and the firm-specific circumstances that shape each financing decision. Keywords: Brand Based Financing, Brand Value, Intangible Assets DOI: 10.7176/RJFA/16-10-03 Publication date: December 30th 2025

Fields of Study & Subjects

Intellectual Capital and Performance Analysis Financial Reporting and Valuation Research Accounting Theory and Financial Reporting

Publication details

Journal / source
Journals & Books Hosting (International Knowledge Sharing Platform)
Publication date
2 January 2026
Language
EN