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Characteristics of Intangible Assets - Research Proposal Example

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The author of this research proposal entitled "Characteristics of Intangible Assets" comments on the changes which have been taking place since 1978, in the global economy as well as financial systems and have been unique as well as gradual in nature…
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Characteristics of Intangible Assets
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Download file to see previous pages A major offshoot was that intangible assets grew in gross disproportion to tangible assets. Still, despite growing ‘suspect’ irregularities in the accounting of intangible assets that emerged from time to time, the world did not place proper regulations in place; one of these missing regulations included presenting clear and proper information of all intangible assets in the balance sheet. In the backdrop of Enron disaster, the UK and US have initiated many changed in different accounting practices such as amendments made in IAS 38 however, there is still lot to be done in terms of intangible asset disclosure in accounting statements as some of the firms are still engaged in practices of evading the inclusion of intangible assets into their balance sheet.
The issue of reflecting intangible assets into the balance sheet is therefore one such issue which not only comes under the purview of prudent accounting disclosures but also reflect the need for viewing it from ethical perspective as the continual use of creative accounting could again create scandals like Enron and World Com with the potential to hamper the progress of better corporate governance methods and tools necessary to bring in more transparency into the corporate world
Statement of the Problem
Intangible assets are defined as assets with the quality of being identifiable as well as quantifiable apart from the goodwill. Thus most of the financial assets used by the firms, mostly with the intention of leveraging the business, are considered as intangible assets. However, the use of intangible assets as one of the critical means of hiding some of the highest importance accounting information with the potential to affect the decision making of investors is on increase as companies, despite tightening regulations and accounting standards is using them to conceal different facts. This has become even more important in the wake of the biggest corporate scandals like Enron and World Com both of which tried to conceal important facts through the reporting of accounting information in a more creative way. The use of intangible assets was one of the most important means used by these firms to hide information.
This also creates very interesting ethical questions of the accounting practices being used by the firms. This research will attempt to discuss whether the scope of the disclosure of the tangible assets in the balance sheet should be increased to include all the tangible assets to be reported on the financial statements
Literature Review
The concept of intangible assets, in itself, is a very important and somewhat different quality associated with them. (Berry, 2004, 15).Intangible assets hold a very different and somewhat blurred distinction between what comprises of the intellectual capital of the firm i.e. in the form of its human resources, copyrights, patents, etc, however, on the other hand financial assets are also often labeled as intangible assets. ...Download file to see next pagesRead More
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