On 5/7/07, Doug Henwood <[EMAIL PROTECTED]> wrote:
intangibles are only valuable insofar as they enable transactions, especially at a higher price than the good or service would otherwise command. What's the point of valuing a "brand" on the balance sheet if it's not going to result in sales. Yeah, I'm a dupe and buy Crest rather than Rite-Aid toothpaste, which is probably bad for my cash flow and good for P&G's, but traditional accounting can fully capture the value of that brand because millions of dupes like me loyally buy Crest. Why should some chump buy bonds based on that intangible value alone when you can buy P&G paper?
Exactly! Traditional accounting has no illusions about the subjectivity of valuations it assigns. The way I look at it, accounting is more about being consistent than correct. That of course is simply not good enough for securitization. Also the value of these brands is hardly transferable. What would I do with some fractional claim to the Crest brand (which is all I'd be left with if P&G went bankrupt)? The whole thing makes no sense at all. -raghu.
