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