Intangible Assets, IAS 38 - Essay Example

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The phrase “without physical substance” means that they are assets that can not be seen, felt, or physically measured. However, an asset means a resource that can be…

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Subject: Finance & Accounting
Type: Essay
Level: Undergraduate
Pages: 5 (1250 words)
Downloads: 2
Author: ukihn

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Another criterion of identifying these assets is from contractual or other legal rights. Examples of these intangible assets would include patents, customer lists, copyrights and computer software. Some of these can be included in the financial statements of a given firm. The sale of computer software would indeed be included in a financial statement. Computer software is a person’s intelligence converted into programs acceptable to the computer platform. Intelligence is an asset that one would not see, touch or physically measure yet the products developed from the same are of great value (Alexander, Britton, & Jorissen, 2010).

Looking at these intangible assets in this perspective, that they can be converted onto tangible assets then one would rightly argue that they should be included in the financial statements of the company. Internally generated brands are those products that are unique to a given firm only. The uniqueness comes into play owing to the fact that they are generated right within the company. They are not bought from outside then sold from the firm but are those generated from within the company (ibid).

They are born of the intangible assets within the firm. Software manufacturing companies are most commonly known for this. Examples of these are Avast, Kaspersky, as well as Avira. These are software manufactured by different companies thus the difference in uniqueness. Lots of debates have been put forward criticizing the inclusion of these internally generated brands into the financial statements. Whichever way one decides to look at it, their inclusion would have advantages and disadvantages which are discussed in the following discourse.

The main advantage lies on the fact that not a lot of monetary resources would be used in their creation. The normal monthly salary of the employee is all it takes to make an employee working in a given firm employ the best of his/her intelligence to the firm. The resulting products from an

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