The Australian Accounting Standards Board

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1. The Australian Accounting Standards Board made Accounting Standard AASB 138 Intangible Assets under section 334 of the Corporations Act 2001. Generally, Assets that do not have a definite existence are called intangible assets. AASB Australian accounting standards board 138 defines an intangible asset as an identifiable non-monetary asset lacking physical substance. It is a claim to future benefits that does not have a financial example. There are three main features of intangible asset as laid by AASB138.They are: 1. Non-monetary: intangible assets are non-monetary assets where assets are regarded as receivable and cash are not intangible assets. Monetary assets are defined as ‘money held and assets to be received in fixed or…show more content…
Those assets that are identifiable company holds for a greater profit margin. For instance, introduction of a new marketing technique for the promotion of sale. Although it cannot be seen it is adding value to the company. An intangible asset is recognizable when the assets has the ability of being divided from the entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract asset or liability; or arises from any contractual or legal rights irrespective of whether those rights are transferrable or separable from the entity or from other rights and obligations. (Para 12 of AASB 138). 3. Lack of physical substance: it is the core characteristic that distinguishes intangible assets from all sort of assets class. It aids in distinguishing fixed asset as plant, property and equipment from other intangible asset. Many people argue that the distinction between tangible and intangible is immaterial and the boundary between these two often arbitrary. However .some even argues that many intangible assets should not be separated from the goodwill in a business combination. The conceptual framework states that physical practice is not essential to the existence of an asset that is why patent and copyright are regarded as asset if future economic benefits are expected to flow to the entity and if is controlled by the entity. There has aroused a serious problem in defining intangible assets in
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