Accounting Standard AASB138 Intangible Assets

Accounting Standard AASB138 Intangible Assets Essay example
College
Essay
Finance & Accounting
Pages 5 (1255 words)
Download 0
The first stipulation given by the AASB138 in reference to accounting for research and development is for amount involved in the said research and development program to be disclosed in an aggregate…

Introduction

This means that as much as possible, no pieces and bits of expenses are to be left out. The collection of every amount that went into spending is supposed to be captured as part of the expenditure development (Deegan, 2012). This also entails a mandate whereby accounting for research and development expenses will not be done in isolation. Rather, it is expected that the expenses making up for the two will be integrated as one so as to have a total aggregate of the expenditure. What is more, the AASB138 requires specific items that cover cost of all internally generated intangible assets to be accounted for (66). These would include costs of materials and services, cost of employee benefits, fees to register a legal right and amortisation of patents and licenses (66, a, b, c). There however exist some freebies as far as items to be covered are concerned as there are entities that are encouraged but not necessarily required. These include amortised intangible assets that are still in use and intangible assets that did not match up the recognition criteria in the Standard (128). 2 Explain the rationale behind the different accounting treatments for research and development expenditures. A critical review of the AASB138 shows that there are different accounting treatments given to varying research and development expenditures. Such differences exist for varying reasons. ...
Download paper
Not exactly what you need?

Related papers

IFRS 3 Business Combinations and IAS 38 Intangible Assets govern how companies should account for and disclose their goodwill an
For instance, all payments made to acquire a business must be recorded at fair value at the date of acquisition. And the contingent payments need to be classified as ‘debt’ which is measured sequentially through the income statement. All costs pertaining to acquisitions are expensed. IAS 38 This standard prescribes accounting policies for treating intangible assets that are not supervised in…
Financial Reporting Research Project : Intangible Assets under U.S. GAAP and IFRS
Here, separable means selling, transferring, exchanging, renting and licensing. There is no contingency regarding they being separable or transferable. Similarly, the US GAAP categories of intangible assets: (1) Limited life intangible asset and (2) Indefinite life intangible asset. An intangible asset is an asset other than financial assets lacking physical appearance (SFAS 142 Glossary) and is…
Approaches to Standard Setting in Accounting
The body also cited the reasons at which it was setting these accounting settings and some of them included; to give users of accounting information about their financial situation, their financial performance, and the financial conduct of a firm (LeRoy, 2007). Another reason was to assist public accountants with steps to enable them perform their work with care in offering their services in the…
Approaches to Standard Setting in Accounting
Financial statements are prepared and presented through observation of relevant accounting standards and procedures. Users of these statements, therefore, need to derive assessments that are realistic in regard to any given entity’s financial status. These users are spread across the economic context, based on the interest of each of them in the financial positions of different entities. To act…
The Relevant International Accounting Standard (IASB)
Contingent assets and contingent liabilities are not recognized but disclosed in the financial statement of the company. The main focus and objective of the standard is that the entity recognizes provision in its balance sheet with is the best estimate of the expenditure to settle an obligation at the end of its financial year. This estimate is the amount of cash outflow that the entity is likely…
International Accounting Standard Individual Assignement
Wanting to conduct business, MIBW4A identified an economical and sustainable method of providing safe and treated drinking water. "Most other efforts to bring clean water to the underserved citizens had relied on volunteerism and had ultimately failed. Those efforts were not market-based and proved to be unsustainable" Kaputt said. MIBW4A established a strong and mutually profitable partnership…
Tangible and Intangible Assets
Intangible assets cannot be seen or felt that is they are non-physical in nature and they are usually non-monetary. Intangible assets are basically the long term resources of the given firm, usually the legal rights of the firm including patents, trademarks, goodwill and copyrights. Intangible assets cannot be destroyed by fires or other tragedies and they usually add value to the company’s…