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The Recognition of Intangible Assets - Assignment Example

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This assignment describes the recognition of intangible assets. This paper outlines the worldview about its permission, recognition of intangible assets, the perspective of business development and economic progress…
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The Recognition of Intangible Assets
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Download file to see previous pages The objective of this essay is to find examples of current practice, alternatives, and research in the field of calculating intangible assets by considering the importance and reliability of such accounting standards.
There have not been many changes to the accounting principles that deal with internally created intangible assets for the past seventy or more years. Intangible assets purchased by the company are treated as capital and the cost involved in the internal generation of these treated as an expense incurred by the company. While assessing the intangible assets of major corporates knowledge capital amounts to $211, $170 and $112 for Microsoft, Intel, and GE respectively.
There are several drawbacks when intangible assets are not reported and this reflects in the financial statement of knowledge-based companies where the importance and reliability of intangible assets are not met.
The Financial Accounting Standards Board does not provide any provision to treat internally generated intangible assets as capital though the board has made procedures to measure the technical feasibility of calculating intangibles. This provision is applicable for companies that are retail the goodwill purchased during acquisition (Siegel, P. & Borgia, C. 2000.).
The IAS 38 was developed to evolve a policy to account for intangibles assets that are not accounted for in any other IAS. IAS requires a business to recognize intangibles only when the asset satisfies certain criteria. The standard has also derived procedures to treat the carrying amount of intangibles which requires certain disclosures about the asset.
According to IAS 38, and intangible assets is a recognizable non-monetary asset that has no physical form and it is under the control of a company and the asset has been maintained as an outcome of past performances(self-creation or buying) and when future economic advantages (cash inflows) are anticipated.  ...Download file to see next pagesRead More
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