Nabeel Jiwani

ISM-Period 1
PROSSER, ELISE K., and James K. Smith. "Accounting for Trade Dress." Journal of
Accountancy. Journal of Accountancy, 01 Nov. 2002. Web. 29 Oct. 2015.
<http://www.journalofaccountancy.com/issues/2002/nov/accountingfortradedress.html>.

Trade dress refers to the unique packaging of a companys product.

After June 30, 2001 all businesses have to perform an annual test
comparing the current fair value of a companys trade dress to its recorded
amount and recognizing if it has gone below this amount there is an impairment
loss.
Recent U.S. Supreme Court rulings, CPAs can help companies establish
and enhance the value of their trade dress by assembling the proper
documentation.
Statement no. 141, Business Combinations, requires companies entering
into such combinations after June 30, 2001, to separately value the acquired
companys significant intangible assets.
Statement no. 142, Goodwill and Other Intangible Assets, requires
companies to value these assets at least annually.
Competitors are not allowed to imitate another companys trade dress so
they dont confuse consumers.
Familiarity with statements 141 and 142 will allow accountants to help a
company document the creation and maintenance of its trade dress.
In recent court decisions, this type of documentation is necessary before
certain types of trade dress are entitled to protection.
Statement 141 means all companies are required that have entered into
business combinations after June 30, 2001 to use the purchase method of
accounting and eliminate the pooling method.
The purchase method requires the acquiring company to separately
recognize all of the acquired companys intangible assets.
If the design of a product isnt essential to its purpose, the courts will
consider it nonfunctional and perhaps entitled to trade dress protection.
For a company to obtain protection, the imitators trade dress must cause
confusion about the source of a product. To determine whether such confusion
exists, courts typically consider a number of factors, such as the similarity of the
two trade dresses, the sophistication of the relevant consumer group, the
defendants intent and any evidence presented of actual confusion.
This source was very in depth on the different aspects of trade dress and how to deal
with it in court and the two statements over CPAs trying to understand the concept of
trade dress.