Accounting for Marketing Activities: Implications for Marketing Research and Practice
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We review accounting principles related to the reporting of marketing activities and evaluate their implications for marketing research and practice. Based on our review, we argue that current accounting practices contribute significantly to the declining influence of marketing within organizations and the rise of myopic management. Financial reports misrepresent marketing contribution and impede its fair assessment. Changes to current marketing accounting practices are needed. Balance sheet recognition of all marketing-related intangibles emerged as the prevailing proposed solution. We, however, argue that balance sheet recognition of marketing intangibles will not remedy the situation. Instead, we advocate expanded mandatory disclosure of marketing-related activities and performance drivers. We advance specific propositions intended to enhance the quality of financial reporting and improve marketing management practice. We further call for specific research to help facilitate improvements in the financial reporting model as it pertains to marketing-related activities.
Source: Working Paper
Mizik, Natalie, and Doron Nissim. "Accounting for Marketing Activities: Implications for Marketing Research and Practice." Working Paper, Marketing Science Institute, 2011.