Knowledge management systems already developed and being implemented will enable better accounting for media related assets. The rise of the Internet and creation of branding in this new media has enormous implications for management accountants that must be addressed. Many marketing related costs, historically booked as expense items, should be capitalized and amortized over the expected period of benefit.

Managing the Marketing Budget
The CFO annually confronts the marketing budget as a kind of sacred cow. Of all operating areas, sales and marketing budgets are usually the hardest to justify, quantify and manage. Sales expense budgets are largely composed of commissions, and as a function of sales these are easier to control and forecast. The marketing budget is the most ephemeral. Smoke, mirrors and marketing doublespeak usually succumb to the opinion that if the marketing budget is not approved as written, the whole sales plan is jeopardized.

The last thing any CFO wants to do is to cause sales not to reach planned levels. So, going largely on faith alone, the marketing budget is usually approved. This is short sighted. Most marketing expenses have benefits that accrue to future periods. And the related expense or cost should be associated with those future periods of benefit.

The Value of Media Assets
According to GISTICS, in 1997, U.S. companies spent $157 billion producing digital content to promote their products and services. This market is forecast to grow at 15-18 percent annually through 2001. Most companies have treated these costs as marketing expense in the period incurred. Some have spread the expense over a fiscal year. Very few have tried to amortize the costs over the true period of benefit. Therefore, most companies have not recognized the value of the media assets generated.

CFOs and accountants have not understood the true importance of these assets in brand building and the resulting continuing benefit derived from these assets. They also have not understood that new techniques make these assets as fully controllable and just as measurable as company fixed assets and inventory. As a result, they have neglected to adequately track, measure and manage these assets.

We see digital media assets as mission-critical business tools and believe these assets should be capitalized and amortized over the expected period of resulting benefit. In the developing digital age, it is easy to see how historic accounting is not keeping with the changes in the competitive marketplace. Large expenditures for branding associated with new products and companies are now the norm, usually occurring before any significant revenues are realized. Generating accounting losses from large brand related media and marketing campaigns is fine for tax purposes where cash is the most important measure.

However, public market valuations of Internet stocks (for example) clearly indicate that media assets, branding and associated expenses do create measurable value. Simple name changes have caused almost immediate increase in market valuation. So far, this has been largely sustainable, and the value of the name and brand itself acquires ongoing, long-term value.

But the accounting standards applied to media asset creation, use, reuse and brand creation have not kept up with the reality of the market. Waiting for a company to be acquired and lumping the value of these assets into the "Goodwill" category is at best archaic, and intellectually indefensible when these assets can be measured, controlled and valued given rapidly developing technology and industry accepted parameters for valuation.

Media assets are assets, much more real in every form than "Goodwill." All media assets can now readily be digitized and stored for future and continuing use. These assets are easy to secure, count, classify and control. Their usage can be monitored and charged out to internal and external users. These assets can be used and reused as needed. They are not always perishable; they are not destroyed by usage.

Look at the vast, ongoing benefit derived from branded media assets related to Disney's creation of Mickey Mouse as an example. Pictures of Mickey can be reused; Mickey can be repackaged in many ways. Each use of Mickey adds value to the Disney brand; "usage" and reuse accumulate value. Each use creates more value in future time periods.

Thanks to trademark and copyright protection, media assets are far more secure than a company's physical inventory and many smaller capitalized assets. Thanks to already developed IT management techniques; these assets when digitized are also more controllable than physical inventory and small capital assets. These assets reside on company or outsourced servers, and copies may be maintained on company owned and/or authorized user PCs.

Framework For Valuing Media Assets
Media assets can be directly measured and in the present environment should be included on the balance sheet as company assets. They can be inventoried, controlled and managed. They can be re-purposed for a myriad of applications beyond the original. The benefits derived from media assets extend over a number of years. We propose the following framework for properly valuing and booking these assets:

• All assets are to be booked at the proper cost. In traditional buyer/seller relationships this is as easy to measure as the invoice price for the services (photo, production, artwork, video, audio, etc.). However, in the current e-commerce environment, many deals are taking place that involve trade offs between producers and companies receiving services. It is impossible to book the value "traded" in many of these deals. A web company may offer equity or web development services to a provider of marketing services at inflated value to secure branding help or media asset development. Clearly, for many of these startup situations, an objective appraisal of services should be undertaken and "cash" market comparable used to book the asset value. Excess cost, over this value would be expensed. A new kind of accountant is needed for this, an e-cost accountant who can properly value these e-assets.

• Media assets have a long life. Branding, naming and positioning expenses should probably be amortized over 10 or more years, arguably longer for established brands (Coke, Crest, Band Aid, etc.). For startups, branding associated media asset creation costs should be minimally amortized over a 10-year time period. When brands are successfully created, values should be adjusted to reflect a longer amortization period for the additional, ongoing creation of assets.

• Some measure of brand effectiveness should be tracked; a ROI on media asset creation and management should be developed.

• The effect of the above changes will be to greatly increase earnings in many startup companies and companies that spend relatively large sums on branding and marketing. This should increase both perceived and real valuations, and properly account for the generation of surplus value now only realized upon sale of the company and its assets.

The tools are already developed to track, measure and control digitized media assets. Historic accounting techniques do not adequately measure or value marketing assets. The rapid development of e-business and huge creation of e-business valuation will cause a sea change in accounting. Management accountants today can choose to ride the wave, or be swept under clinging to historic accounting standards and systems designed to meet the needs of already outmoded and obsolete business models.

Brands are built through accumulated marketing expenditures that are better amortized over the expected life of the brand or company. It is time to value brand building properly, and ensure that the media asset costs are properly expenses over the life of the brand or company.