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Essay sample - Accounting Standard AASB138 Intangible Assets
Finance & Accounting
Pages 5 (1255 words)
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…
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. ...
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