Does a company logo change require a material disclosable event?

By Joseph Nguyen AAA
A:

A company logo change usually constitutes a material disclosable event. Securities law requires that companies disclose all material information and corporate events to shareholders, and material information withheld from shareholders could be a violation of the law. A logo change is normally a material change if the business depends on its brand value or recognition of the brand to attract consumers. For example, if Coca Cola was to change its famous logo to something drastically different, this would be a material event. In addition, logo changes are usually public knowledge right away because they are quite hard to hide from shareholders.

Some examples of other common material events include: a company's entry into or termination of material agreements, material financial obligations or off-balance sheet arrangements, material costs of disposal activities or material costs of exiting a project, and material errors in a previous financial statement. Additionally, material impairments, delisting from a stock exchange or failure to meet listing requirements are also material events.

In general, to determine if something is a material event, you would have to ask if that information was revealed, would it affect a shareholder's investment decision. This process of determining if something is material can be quite subjective, and further information and guidance can be obtained from the Securities and Exchange Commission (SEC).

For more on disclosures, take a look at our article Disclosures: The Good, The Bad, And The Ugly.

This question was answered by Joseph Nguyen.

RELATED FAQS

  1. What is liquidity risk?

    Learn how to distinguish between the two broad types of financial liquidity risk: funding liquidity risk and market liquidity ...
  2. What is a good gearing ratio?

    Understand the meaning of the gearing ratio, how it is calculated, the definition of high and low gearing, and how they reflect ...
  3. What is a good interest coverage ratio?

    Learn the importance of the interest coverage ratio, one of the primary debt ratios analysts use to evaluate a company's ...
  4. What is a bad interest coverage ratio?

    Understand how interest coverage ratio is calculated and what it signifies, and learn what market analysts consider to be ...
RELATED TERMS
  1. Civil Rights Act of 1964

    Landmark federal legislation that prohibits discrimination on ...
  2. Occupational Safety And Health Act

    Law passed in 1970 to encourage safer workplace conditions in ...
  3. Administrative Order On Consent (AOC)

    An agreement between an individual or business and a regulatory ...
  4. Accident Year Experience

    Premiums earned and losses incurred during a specific period ...
  5. Licensed For Reinsurance Only

    A license that allows a company to engage in services related ...
  6. Book Value Reduction

    Reducing the value at which an asset is carried on the books ...

You May Also Like

Related Articles
  1. You may owe money, but you still have rights. There's a long list of things debt collectors are banned from doing to you. Know what's illegal.
    Credit & Loans

    5 Things Debt Collectors Can't Do To ...

  2. Sounds like a bad horror movie, but it really could happen to you. Here's how to identify zombie debt and send collectors back to the dead-debt graveyard.
    Credit & Loans

    How To Beat Off A Zombie Debt Collector

  3. Understanding how the debt collection business works will give you a better chance of coming out ahead if you ever have to tangle with a collection agent.
    Credit & Loans

    Inside Secrets Of The Debt Collection ...

  4. Investigate these expat havens if you seek a developed country with low barriers for getting a permanent resident visa – sometimes even citizenship.
    Personal Finance

    5 Developed Countries That Welcome Expats

  5. Two years into his first term, Mexican President Enrique Peña Nieto is following through on radical campaign promises he made to Mexican citizens for sweeping multi-industry reform.
    Investing News

    Mexicans Unsure about Mexican Reforms

Trading Center