AASB 138 Intangible Assets is an Australian Equivalent International Financial
Reporting Standard (AIFRS) applicable to financial years beginning on or after 1
As intangible assets have become more and more important to companies and investors, the requests about intangible assets to be measured by the independent calculation is getting higher and higher. So the activities of having a separate standard for intangible assets is necessity and reasonable. But the conservative approach of accounting standards to intangible assets has brought many disputes. Based on the understanding of AASB 138, the attitude of accounting standard is reasonable and understandable since any improvement should experience many good practices and not disorder the stability of financial system. But in contrast, at the urgency time of the absence of financial statements, the accounting standards should make more efforts to improve the recognition, measurement and reporting of intangible assets.
In the knowledge-based economy, as the more intensifying of the competition, the knowledge and the information are playing more and more prominent roles in the business world to determine the success of the corporate. As a result, the identifying and measuring the intangible assets have been the heated issues attracted many regulators and companies' attention. Being response to the tendency of the economic development, the regulators of the accounting has separated the standard of intangible assets from the tangible assets and formulated some new rules to measure the intangible assets. But on the way of improvement the measuring and reporting intangible assets, the standard has always adopted the conservative attitude which also arises many controversies from the companies and the regulators. This easy will firstly help people to know clearly about the definition of intangible assets, and then discuss the necessity to separate intangible assets from tangible assets. Following this, it will critically assess the conservative approach of accounting standard to recognition, measurement and reporting of intangible assets which has raised many contentious.
There is currently no Australian Accounting Standard that comprehensively deals
with intangible assets. However there are general requirements contained in a number
of standards that are applied to intangible assets. AASB 138 will replace the general
requirements in six current Australian standards including AASB 1041 Revaluation of
Current Assets, AAS 21 Acquisitions of Assets, AAS 13 Accounting for Research and
Development Costs and AAS 18 Accounting for Goodwill. AASB 138 also covers
some of the general principals covered in Statement of Accounting Concepts (SAC) 4.
This Policy Summary goes through the main requirements in AASB 138 and also
outlines the main differences between the general requirements in the existing AASB
and AAS standards regarding intangible assets and the new requirements of
Definition of Intangible Assets
Within a corporate, it can usually comprise many different tangible assets such as the office equipment, the real estate and the computers which can be valued with the market values and be transacted in trade. But like the brand awareness, the copyrights and the customer and supplier relationships which are not visible ...