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.

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