Goodwill in financial terms is used to explain the intangible assets of an acquired company. Accountants often refer to goodwill as a balance sheet leveler in acquisitions, as it is derived by the cost of the acquired business minus the value of tangible assets. Goodwill has gone from being an appendage to corporate value 30-40 years ago to frequently, being the lions’ share of transaction value in the past 10-15 years. Unfortunately, goodwill is failing to serve investors and companies alike as intangible assets become more valuable and vulnerable.

Product brand and corporate brands are among the many intangible assets that should be managed for value creation and strategic leverage with the consumer as well as with the financial community. The materiality of intangible assets requires more transparency and matching of activities to cash flows, just as with the evolution of managerial accounting practices that began nearly a century ago for plants, equipment, and labor forces. Consequently, similar guidance is becoming an expectation for brand-driven companies like Kraft Heinz with measurable customer bases and related intangible assets that are recognizable by the consuming public and the financial markets. Not providing transparency will have consequences such as significant write-downs ($15 billion write-down for the acquisition of Kraft) of brands and restatements of financial reports.

Those companies that have a solid grasp of how their brand(s) and other intangibles drive corporate value should outperform ones that don’t understand or manage these assets. The question is, do boards, C-suite leadership, and major shareholders have the vision and courage to be well versed in knowing the intangible asset value relationship?

In a recent interview on CNBC, Warren Buffett of Berkshire Hathaway said he paid too much for Kraft Heinz and was, in turn, forced to write down $3 billion of the acquisition. In early May, Mr. Buffett again defended the investment in Kraft Heinz at the annual meeting of Berkshire Hathaway, but he also said that relationships could sour if the acquirers paid too much. If Buffett didn’t see the nuances in the financial statements of a company he was investing in, you can be certain that the average investor missed it. You can also be confident that more scrutiny will focus on intangible asset disclosures by investors and regulators in the future.

Goodwill on the balance sheet isn’t good enough. Until a better, more transparent accounting, or fair value method replaces goodwill, intangible assets will remain impossible to manage and unaccountable to shareholders.