Premium Essay

Accounting and Accountability

In: Business and Management

Submitted By nilang
Words 1083
Pages 5
Abstract

Intangible assets have been given a lot of attention by accounting professionals and other parties involved with their financial reporting lately, due to the difficulty they present in being precisely valued, classified and accounted for. For some companies, intangible assets make up the majority of their total company’s assets; for other companies, intangible assets are very small part of their total assets. In either case, accounting treatment of intangible assets has seen some interesting twists occur in the accounting world, especially after the introduction of AASB 138 ‘Intangible Assets’ in 2005. This paper aims to expose some of the new ways intangible assets are being accounted for in financial reporting regarding intangible assets since the inception of the new standard.

Introduction

Intangible Assets: An Overview

Intangible assets are those assets that are identifiable, have no physical substance, and are non-monetary. Companies frequently use their resources, or incur liabilities, upon acquiring development, maintenance or enhancement of intangible assets (CPA Australia, 2009a). Some common examples of intangible assets include software, patents, copyrights, motion picture films, customer lists, mortgage servicing rights, fishing licenses, import quotas, franchises, customer or supplier relationships, customer loyalty, market share and marketing rights (CPA Australia, 2009a). Common headings that intangible assets fall under include systems, technology, licenses, intellectual property, market knowledge, trademarks (including brand names and publishing titles), copyright, franchises, patents, marketing rights and customer lists (Government of Western Australia Department of Treasury and Finance [GWADTF], 2009).

Accounting treatment for intangible assets is outlined in the Australian Accounting Standards

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