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. How is the Altman Z-Score used in fundamental analysis?

    Learn about the Altman Z-score, how it is calculated and how to interpret the Altman Z-score to assess the viability of a ...
  2. What does the bottom line figure illustrate?

    Learn about net profit, why it is referred to as the bottom line and what this figure illustrates about a company's profitability ...
  3. What is the difference between the capital adequacy ratio vs. the solvency ratio?

    Understand the different applications for using the capital adequacy ratio and the solvency ratio, which are both equity ...
  4. What are some examples of efficiency ratios used in measuring businesses?

    Learn about some of the most common efficiency ratios that market analysts and investors use in the process of evaluating ...
RELATED TERMS
  1. Contra Proferentem Rule

    A rule in contract law which states that any clause considered ...
  2. Capital Expenditure (CAPEX)

    Funds used by a company to acquire or upgrade physical assets ...
  3. Cumis Counsel

    Legal counsel chosen by the insured when the insurer has a conflict ...
  4. TSA PreCheck

    This program allows travelers deemed low-risk by the Transportation ...
  5. Lilly Ledbetter Fair Pay Act

    A federal law designed to ensure equal pay for all workers, regardless ...
  6. Age Discrimination In Employment Act Of 1967

    A federal statute protecting "certain applicants and employees" ...

You May Also Like

Related Articles
  1. Investing

    What is Tim Cook's career and educational ...

  2. Budgeting

    Quickbooks vs. Quicken

  3. Mutual Funds & ETFs

    The Impact of the Janus Market Timing ...

  4. Stock Analysis

    Why Should You Invest In Stratasys Today?

  5. Fundamental Analysis

    The Best 5 Online Accounting Systems ...

Trading Center