Cor pora te rep or ti n g

(1 mark) 
 (Max: 
4 
marks) 
Internally generated brands 
The Framework defines an asset as a resource controlled by an entity as a result of a 
past event that will lead to a probable inflow of economic benefits. 
(1 mark) 
Brands, whether internally generated or purchased, do therefore meet the definition 
of an asset. 
(1 mark) 
The Framework says that items are recognised in the financial statements if they 
meet the definition of an element, and if the cost or value can be measured reliably. 
(1 mark) 
The cost of an internally generated brand cannot be measured reliably. 
(1 mark) 
This is because the costs of developing a brand cannot be separated from the day-to-
day running costs of the business. 
(1 mark) 
Therefore, the fact that internally generated brands are not recognised in the 
financial statements is consistent with the Framework.