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Claims the greatest challenge facing the accounting profession is understanding the huge difference between its balance sheet and market valuation. This gap represents the core value of the company ± its intellectual capital represented by brands, products, competitive advantage, patents, trade marks, customer relationships, R&D, human capital etc. The present financial accounting framework is criticised, especially in the USA and Europe, as inadequate and failing to communicate the most important assets and resources of today's business, known as intangible assets or intellectual capital. As a result, there is a huge value gap and distortions between a business entity value as reported in the financial statements with the value put by investors on the stock market or even in merger and acquisitions cases. In the new knowledge economy (k-economy), knowledge rather than physical assets drives innovations, revenue and profits growth, and nurtures new competitive advantages. Looks at the challenges encountered by accounting and where it is heading in the k-economy environment.

With the development of computerization and networking capabilities, there is a significantly enhanced opportunity for sharing information and knowledge world‐wide. For an organization to survive in these turbulent times, there is a great need for its continuous renewal through the introduction of new, innovative products and processes that are based on new knowledge. As a result, the management and measurement of intellectual capital have attracted a lot of attention in recent years both in the media and from academia. This paper assesses different methodologies of intellectual capital measurements, both from a macro valuation standpoint and from the operating perspective. Valuation metrics are suggested and it demonstrates how it is applied to a cross‐section of firms. The paper also shows that there is no conceptual framework commonly accepted and there is a considerable lack of consistency both inter‐country and intra‐country. This paper has taken three firms from distinct industries and has applied human, relational or structural capital metrics depending on which is the most relevant.

Recognizing brands on the company's financial statement as an identifiable intangible asset is a relatively recent development in financial reporting, which only became a focus of attention in the late 1980s. Accounting bodies throughout the world have appeared uncertain as to how to treat the issue of placing a brand in the financial statement as there is little guidance and less understanding over accounting treatment of brand valuation. The debate over procedures for valuing brands and including them as a fixed asset to the corporate financial statement has become a great controversy. As a descriptive study, the present conceptual study highlights the problems associated with brand valuation. Many corporate companies support the fact that valuing and hence capitalizing their brand bring a lot of advantages to the organization. The present study examines four main methods of valuing brands, namely the cost-based method, marketbased method, income-based method and formulary method. The method used in every valuation is subject to the suitability of the brand condition determined on their existing uses. A few recommendations based on the conceptual study are made in order to meet the needs of organizations and the business community as well.