Interpretations of manufacturers’ consumer brands and financial reporting: An exploration of multiple realities

Abstract

In this study, interpretations of the nature of brands and financial reporting with reference to brands disclosure are examined in an interdisciplinary, multifaceted, and exploratory investigation which incorporates a strong empirical focus. The thesis constitutes interpretive research into brands and financial reporting as complex, dynamic constructs of contemporary society. Through interests in the creation of brands in contemporary consumption and aspects of financial reporting, the thesis is informed by marketing, sociology and accounting. The specific focus of the study is manufacturers’ consumer goods brands. Problems of reporting brands as company assets were illustrated by accountants’ reactions in the United Kingdom to the actions of Ranks Hovis McDougall pie, which, in 1988, recognised and disclosed acquired and self generated brand assets at a valuation in the company’s annual financial statements. Issues concerning the reporting of brands as assets on corporate balance sheets continue unresolved. This study focuses upon interpretations of diverse business people, who, directly and indirectly, are involved in aspects of creating manufacturers’ brands, or with the financial statements, in which some companies now report consumer brands at valuation as corporate assets. The thesis pursues an interpretive approach, based within the naturalistic paradigm. Central research questions are ‘What is a brand?’ and ‘How do brands fit with financial reporting?’ The interdisciplinary nature of the research impacts upon the study design. Dynamic fields of marketing and accounting/finance provide the framework within which are situated the sixteen institutional reference groups of some seventy interview respondents. The multiple realities, constituted by group and field perspectives, yield diverse interpretations of brands and financial reporting. The design of the study explicitly introduces potential for levels of comparison across and within fields of marketing and accounting/finance, and between and within the reference groups. Within the framework of the naturalistic paradigm, ethnographic methods shape the execution of empirical fieldwork, and creation of the chapter texts. The design of the study incorporates development of thick descriptions which give cultural and contextual dimensions for the field reports from analyses based upon the extensive interviews. Wide ranging interpretation combines field reports, thick descriptions and background themes. Thick descriptions are built in chapters three and four through exploration and interpretation of issues significant for the central research questions of ‘What is a brand?’ and ‘How do brands fit with financial reporting?’ Extensive sources are drawn upon - bodies of appropriate literature; a prior in depth analysis of brand disclosures in annual reports of listed New Zealand companies; company documents filed at the Companies Office, Department of Commercial Affairs; and diverse social, legal, and accounting documents. The empirical research data derives from sixty one taped interviews and further interviews through questionnaires. The empirical data was analysed to yield two separate chapter reports which are framed by conceptual themes reflexively developed in the stages of the empirical data analysis. The reports from the fields incorporate verbatim quotations. The analysis and reporting processes are informed by the thick contextual and cultural descriptions. Consequent interpretation is structured within the conceptual themes framework. The interpretation develops insightful perspectives of brands through combining dimensions of understanding of brands and financial reporting constructs arising within multiple contemporary commercial realities. Key patterns of explanation constitute the findings of the research study. The contributions of this research to accounting knowledge may be classified in diverse categories, and at different levels. Firstly, there is the original contribution to the understanding of brand natures and their complex construction derived from the research anchored in marketing and sociology. Secondly, by exploring aspects of brand natures, the study further elucidates the brands-financial reporting interface. Through developing insights into the nature of brands, the study enables greater understanding of those properties of brands significant for accounting practice. The study raises questions out of its analysis of the fascinating world of brands and their interface with financial reporting. Through research into the brand as a contemporary commercial construct, the thesis raises analogous questions for financial reporting as another business construct which gains shape and contemporary meaning in current commercial practices. The study makes an original methodological contribution, because its research design and execution enable particular insights into brand natures to facilitate better informed financial reporting regulation. Finally, the thesis fulfils a confirmatory role; through the verbatim words of respondents, the study offers direct confirmation of views expressed in recent literature.