The paper reports both the results of an empirical investigation into the effects of the decisions of 13 UK companies to include brands in their published balance sheets on the prices of their shares, and also an examination of hte motivations for these decisions from a costly contracting perspective. Price gains appear to be positively associated with the proportionate increase in reported net assets caused by capitalizing brands. On the other hand, when allowance is made for the contemporaneous release of other information, little, if any, of the share price behaviour around the announcement dates can be attributed to the capitalization of brands - a finding consistent either with the capital market having already formed unbiased expectations of brand values prior to disclosure, or with its having serious doubts about the credibility of the valua- tions. Consistent with a costly contracting perspective of accounting method choice, we found that brand capitalization had a marked impact on reported gearing levels and more or less eliminated the higher gearing levels of capitalizing firms relative to similar companies, particularly as far as late adopting firms were concerned. Brand capitalization also had a particularly marked impact on book-to-market-equity ratios; capitalization served to increase the ratios of capitalizing firms to approximately the levels observed on the non-capitalizing controls.