The Moribund Effect

Definition

The Moribund Effect results from an established accounting practice by which the value of a brand that is acquired, measured and added to the balance sheet by a company cannot be increased no matter how well the brand might perform after its acquisition. [1,2]

According to the Oxford English Dictionary, “moribund” can mean ‘‘lacking vitality or vigor.”  That is the sense in which the word is being used; i.e. the recorded brand value can be misleading as it can make a growing brand appear stagnant. [3]

See Also

YouTube: FINANCE in MARKETING: Accounting for Brands [Kevin Lane Keller]

References

  1. Journal of Brand Management: Brand value, accounting standards, and mergers and acquisitions: “The Moribund Effect” – Sinclair/Keller Jan 2017
  2. Common Language in Marketing Project with Kevin Lane Keller, 2019.
  3. Oxford English Dictionary, oed.com

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