International Journal of Scientific Research and Engineering Development

Contemporary accounting standards—GAAP ASC 350/720 and IFRS IAS 38—mandate the immediate expensing of most advertising and marketing expenditures, creating a systematic undervaluation of brand assets on corporate balance sheets. This article develops and evaluates a framework for capitalizing a portion of marketing investments as brand equity intangible assets, subject to systematic depreciation, and examines how such capitalization materially improves the accuracy and utility of capital budgeting models. Using a mixed-methods approach combining doctrinal regulatory analysis, illustrative empirical adjustments derived from secondary data for 24 S&P 500 consumer goods and technology firms, and multi-period simulation modeling, we demonstrate that capitalizing 40–60% of qualifying advertising spend increases reported intangible assets by 18–35% and improves NPV accuracy by 12–28% in high-growth firms. Simulation results further show that brand asset amortization smooths earnings volatility and produces more economically meaningful EVA and IRR signals. The central research question—how advertising and marketing expenditures can be integrated as intangible capital in corporate capital budgeting models by linking spend to brand asset creation and depreciation—is addressed through a formal capitalization model, four illustrative tables, and three figures. Findings carry significant implications for CFOs seeking improved capital allocation, CMOs requiring financial accountability frameworks, auditors navigating fair-value intangible disclosures, and investors demanding greater balance-sheet transparency in brand-intensive industries.

Ananthagopal V, Adithya A, Abel Jopaul V P, "Brand Equity as Intangible Capital: Frameworks for Integrating Marketing Investments into Corporate Capital Budgeting Models" International Journal of Scientific Research and Engineering Development, V9(2): Page(176-182) Mar-Apr 2026. ISSN: 2581-7175. www.ijsred.com. Published by Scientific and Academic Research Publishing.