The Impact Of Intangible Assets In Australia

Despite those enormous advantages, it has been argued that IFRSS adoption lead to significant costs. The main argument is that IFRSs do not consider local needs and priorities as every country has their own ‘business environment, legal systems, cultures, language and political environment’ (Henderson and Peirson, 2000 cited from Malthus, S., 2004). However, to overcome this problem, IASB can accommodate flexible reporting standards that enable companies to choose alternatives that are more suitable for their external condition. It is opinion of some opponents of IFRS adoption that IAS is ‘insufficiently detailed’ (Uddin,M.S., 2005, p.4) that require accountants’ and auditor’ professional judgment. However, overly detail might be contra productive and not flexible in anticipating every changes and differences.

In May 2008, the AICPA’s Governing Council designated the International Accounting Standards Board (IASB) as the body authorized to establish international financial accounting and reporting principles under rule 202 and 203 of the AICPA Code of Professional Conduct. Below is an illustrative Independent Auditor’s Report on financial statements issued in conformity with IFRS.

As stated earlier, the IASB arose from specific needs of the accounting industry and the public. As international trade has increased, the need for transnational accounting information has increased as well. This sparked the demand for development of international accounting standards to make financial data between countries more comparable. In 1973, the International Accounting Standards Committee (IASC) was formed to develop these international standards. The standards issued by the IASC, prior to 2001, were called International Accounting Standards (IASs). In 2001, the IASC made the International Accounting Standards Board (IASB) the official international standard-setting body. The standards issued by the IASB are called International Financial Reporting Standards (IFRSs) (Schroeder, Clark, & Cathey, 2011, p. 82-87).

In addition, it is very important to owners, investors and creditors by presenting the financial position, cash flows and financial performance. AASB develops and maintain high quality financial reporting standards for all sectors of the Australian economy and contribute to the development of global financial reporting standards to be recognised. Moreover, this can identify technical issues (Brian, 2003). When AASB identify a technical issues, it will develop a project proposal. A project proposal may include an assessment of the potential benefits of undertaking the project and the costs of not undertaking it and then the project proposal will be reviewed and made a decision by the AASB. This has close relationship with FRC and IASB (Flikkers, 2008).

Intangible Assets were part of the 2006 “memorandum of understanding” between FASB and IASB. Eventually, intangibles assets were cut from the list of changes to be made. In future years the problems will have to be addressed. As far as research and development costs, IAS 38 will likely be fully adopted. One major problem still being faced is the revaluation of intangible assets. Under GAAP, revaluation is strictly prohibited. Under IFRs, revaluation

For nearly half a century, a movement has been underway to establish a high-quality, comprehensive set of international accounting standards, with the goal of facilitating international trade and investment. In the global capital market, differences in the rules of accounting for the purposes of recognition, measurement, and reporting of financial results have impaired the smooth transfer of information across borders. Given that it accounts for nearly a third of the global market, there is considerable pressure for the United States to conform to the International Financial Reporting Standards (IFRS), as promulgated by the International Accounting Standards Board (IASB). While moving to a single set of accounting standards could create

In May 2014, IFRS 15 regarding revenue from contract with customers is released by International Accounting Standards Board (IASB) and Financial Accounting Standard Boards (FASB). Since Australian Accounting Strandard Boards (AASB) comply with IFRS, subsuquently, AASB issued AASB 15 replacing AASB 111 and AASB 118.

AASB 138 Intangible Assets is equivalent to IAS 38 as issued by the International Accounting Standard Board. This standard prescribes the accounting for intangible assets which are not dealt with specifically in another standard. In simple words, intangible assets are those non-monetary assets which do not have any physical substance. This includes Goodwill, patents, copyrights, research and development, etc. These kinds of assets do not have any physical substance, but these assets add value in the business. For example: According to Forbes, the brand value of Coca-Cola is $54.9 billion, as the brand is such asset which don’t have physical substance, it can be identify as Intangible

IAS 38 is an accounting standard regarding intangible assets. It supplies accounting rules for intangible assets that are purchased, acquired in a business combination, and internally generated. According to Investopedia, intangible assets are nonmonetary assets without a physical presence, that have useful lives greater than one year. This type of asset is held for use in the production of goods or services, for rental to others, or administrative purposes. Examples of intangible assets include trademarks, customer lists, licensing agreements, service contracts, etc. Brand name

Political and economic forces shape accounting. The increased worldwide integration of politics and markets raises the necessity for integration of financial reporting standards. The integration is driven by the reductions in the costs of information processing and communication. International Financial Reporting Standards are a common business affair language in the globe for easier comprehension and comparison of company accounts across international boundaries (AICPA). The standards are issued by the International Accounting Standards Board. The IASB is a United Kingdom body that was established in 2001 and is based in London. The historical cost paradigm authorizes the IFRS except IAS 29 and AFRIC 7, which

However, it must not be ruled out that the basic financial statements are similar to those of the IFRS standard (Epstein & Jermakowicz, 2010). The FASB conceptual framework bears a marked similarity to the IASB framework which works to effect efficient preparation and presentation of financial statements. It is under this framework that convergence with the IFRS is promised. However, there exists a comprehensive guide in view of financial statements in terms of preparation and presentation in the IFRS standards. There is also a minimum point identified for the identification of all items in the financial statements. In the IFRS, both the FASB and IASB frameworks are essential in the preparation and presentation of financial statements. However in these IFRS standards, the IASB is less detailed. Convergence with the GAAP is also promised.

The journal article named “The effect of IFRS Adoption on the financial reporting of local government entities” By Kamran Ahmed and Manzurul Alam aims at finding the changes of key accounting components surplus, equity and asset while changing accounting policy from Australian Accounting Standards (AAS) to International Financial Reporting System (IFRS).Introduction of International Financial Reporting System (IFRS) is thought to be a paradigm shifting event in financial reporting system. Australia is one of the first countries to adopt IFRS for the local government. It was a great challenge taken by Australia to adopt IFRS before USA and EU. In 2004 Australia adopted IFRS to their accounting policy. Afterwards, through the

The international accounting standards board (IASB) determines the regulations under which organizations operating internationally and adhering to international financial reporting standards (IFRS) must compile financial statements. In 2003, the IASB issued international accounting standard 2 (IAS 2) regarding valuation of inventories, which has similarities and differences to United States generally accepted accounting principles (GAAP). IFRS adopted this standard in 2005 (Krishnan & Lin, 2012). Despite similarities, when calculating inventory values for Beech Corporation the value of inventories is distinctly different under GAAP than under IAS 2.

By incorporating the use of stakeholder comments and public forums, the AASB has taken steps to facilitate the need to consider the expectations of the public. Looking closer at AASB 138 Intangible Assets, this standard was formed using the standard setting process outlined previously.

According to Mary E. Barth (2007), an analysis regarding the latest activities of the International Accounting Standard Board (IASB) have revealed that the use of fair value as a measurement base in financial accounting is probable to increase. With the increased probability of using fair value as a measurement base and the adoption of international accounting standards by Australia, it