The Clear and Concise Discussion Advanced Financial Accounting

Question: What are the key Characterristics of an Intangible Assetss ? Answer: Introducation One of the major accounting packages of InternationalFinancial Accounting Standards is the introduction of AASB138 Intangible asset. It can be seen that the adoption of AASB138 Intangible asset has changed the way for the Australian companies to account and report of the intangible assets of the organization. The introduction of AASB138 Intangible asset has included some major flaws in the process of accounting; and due to this reason, the business organizations failed to provide the correct financial information to the users of the financial statements (ro.uow.edu.au 2017). The Australian constituents resisted to adopt the policy of AASB138 Intangible asset; but still the standards became effective from 1st January 2005. Most of the accountants all over the world have considered the fact that the introduction of AASB138 Intangible asset will have a major negative impact on the accounting process of the Australian companies. The new standard of AASB138 Intangible asset defines the in tangible assets as an identifiable non-monetary asset without physical substance. In addition, the standards of AASB138 Intangible asset have also said that the intangible assets must be distinguishable from the goodwill of the organization (Chalmers et al. 2012). One of the major disadvantages of the introduction of AASB138 Intangible asset is that this procedure has prohibited the recognition of the intellectually generated brands publishing titles, list of customers, mastheads and others. As per the new rules and regulations of AASB138 Intangible asset, all the intangible assets of the organizations must be value based on cost (Halim and Jaafar 2012). The prior standard before the introduction of AASB138 Intangible asset allowed the companies of Australia to value their different intangible assets based on fair value method. With the help of the fair vale method, the companies would be able to obtain the proper value of the intangible assets. However, with the adoption of cost method has restricted the companies to obtain the exact value of their intangible assets. Later on, AASB138 Intangible asset has allowed the companies to do revaluation of their intangible assets based on fair value method. At this point of time, it is not possible to exactly gauge the amount of impact on the Australian companies; however, as per the suggestions of the Australian media companies, the impact of AASB138 Intangible asset is going to be significant. On a broader sense, the introduction of AASB138 Intangible asset has clearly shown the inability of Australian Regulators to make their voice heard in the stage of International standard setters (Steenkamp et al. 2016). References Chalmers, K., Clinch, G., Godfrey, J.M. and Wei, Z., 2012. Intangible assets, IFRS and analysts earnings forecasts.Accounting Finance,52(3), pp.691-721. Halim, H.A. and Jaafar, H., 2012. Intangibles Disclosure and Capital-Raising in Australia: An Analysis of Information Intensity.Journal of Accounting and Finance, Asian Academy of Management. ro.uow.edu.au. (2017).AASB138 intangible assets - the bad apple in the IFRS barrel. [online] Available at: https://ro.uow.edu.au/cgi/viewcontent.cgi?article=2461context=commpapers [Accessed 25 Apr. 2017]. Steenkamp, N., Steenkamp, N., Steenkamp, S. and Steenkamp, S., 2016. AASB 138: catalyst for managerial decisions reducing RD spending?.Journal of Financial Reporting and Accounting,14(1), pp.116-130.