Hilton Hotels Corporation and Marriott International provide hospitality services. Hilton Hotels’ well-known brands include Hilton, Doubletree, Hampton Inn, Embassy Suites, Red Lion Hotels and Inns, and Homewood Suites. Marriott also owns or manages properties with recognizable brand names, such as Marriott Hotels, Resorts and Suites; Ritz-Carlton; Renaissance Hotels; Residence Inn; Courtyard; and Fairfield Inn.

On its balance sheet, Hilton Hotels Corporation includes brands of $2.8 billion, or 17 percent of total assets. Marriott International, however, does not list brands among its intangible assets.22 What principles of accounting for intangibles would cause Hilton to record brands as an asset while Marriott does not? How will these differences in accounting for brands generally affect the net income and return on assets of these two competitors?