The Standards Of The Ias 38 Standards

6-8). For an asset to have alternative use, it must be reasonably expected (greater than a 50% chance) that an entity will achieve economic benefit from such alternative use and further development is not needed at the acquisition date to use the asset (E&Y, pg. 6-9).While under IFRS, acquired research and development assets are capitalized if it is probable that they will have future economic benefits. The price paid reflects expectations about the probability that the future economic benefits of the asset will flow to the entity. The probability recognition criterion is always assumed to be met for separately acquired intangible assets (E&Y, pg. 6-9). The starting point for companies applying IFRS is to differentiate between costs that are related to ‘research’ activities versus those related to ‘development’ activities. According to KPMG, while the definition of what constitutes ‘research’ versus ‘development’ is very similar between IFRS and US GAAP, neither provides a bright line on separating the two. Instead, a company needs to develop processes and controls that allow it to make that distinction based on the nature of different activities.

The business model is fractured as it relies almost entirely on in-house research. However when there are imbalances between funding operating expenditures versus research expenditures and the consideration of cash flow the challenges surface to the

In intellectual property assets and software showed its opening balance, closing balance, additions, disposals, accumulated amortization and impairment currency translation differences and net amount. Goodwill just showed the opening and closing balance and currency translation difference not any impairment loss. However, in intangible capital work in progress, it also showed other more informationabout amount transferred to software intangibles and transferred from PPE. At the end of the notes 12 of intangible assets, it provided additional information about the amortization charge that was recognized in general and administration expenses in the statement of comprehensive income （CSL annual report 2011）and impairment tests for cash generating units containing goodwill. CSL Behring and CSL Blotheraples all were CSL’s goodwill. The total intangible assets in 2011 were lower than before because of amortization in every year.

The field of accounting is constantly evolving. This is true not only for the theory of accounting itself but also the entities that govern its theory and practice. Presently, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) are faced with some of the biggest challenges to date. To understand the significance of these two boards, it is necessary to understand their histories, relations between the boards, and the standards that they set. Also how the knowledge of these boards and the field they lead, gained through the masters of science in accountancy

The aim of this report is to distinguish between capital expenditure and revenue expenditure and to explain the accounting treatment of different transactions. The classification of expenditures as capital or revenue will have an impact on the statements of financial position and comprehensive income. Therefore, when preparing financial statements, accountants need to adhere to and comply with the rules and regulations set out by the International Accounting Standards Board (IASB). As such, the report is limited to discussing the various expenditures covered by accounting standards. Furthermore, the report identifies what items can be recorded in accounts as assets in terms with the relevant accounting standards.

Research and Development activities are the cornerstones to corporations attempting to develop or improve their products or manufacturing methods or facilities. Companies normally undertake these activities with the expectation that the result will generate significant income. This paper will attempt to expound on the accounting treatment of Research and Development costs and problems regarding classification of research and development costs and differences between accounting treatment of research and

States. Companies should report income, liability, equity, and assets. Many people (stockholders, investors, etc.) who have a stake in the company want to know this information before providing a service. In this paper, International Financial Reporting Standards (IFRS) and the Generally Accepted Accounting Principles (GAAP) will be compared for

Furthermore, the Key Audit Matter (KAM) of goodwill and intangible assets disclosed in Telstra Corporation Ltd annual report are recognised as core assets. In note 2.4.2, it can be seen that intangible assets has the highest deferred tax liabilities after non-current assets. This is to be expected since it is a telecommunication and technology company so the cost incurred is significant for intangible assets such as research and development, capital costs and obtained intangible assets. Therefore, this is considered highly material as the events or transactions would impact Telstra as a whole such as the industry competitiveness and not just the financial statement alone. Moreover, it is complex to evaluate the impairment of the goodwill and

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

| The answer thoroughly and accurately portrays the accounting treatment of internally generated intangible assets, referring appropriately to the media article, AASB 138 and the AASB Framework.

Industry experts considered IAS 18 Revenue to be inadequate for complex accounting transaction applications and ASC605 contained various industry-specific main and sub requirements that did not achieve the goal of consistent revenue recognition outcomes. (McConnell, 2014). The IASB and FASB boards have issued 2 separate standards for revenue recognition and the contents exhibit several differences (See Exhibit 1: Appendix). To understand the usefulness of the IFRS15 standard a regulatory framework, the study of the differences between IFRS and US GAAP as well as the motivation behind the decisions made in standard setting is crucial. Key difference which could potentially affect the usefulness outcome is the prohibition of unrealized impairment loss reversals under ASU606. The updated revenue recognition standard by definition describes that a contract asset or contract liability arises in the event that either party to said contract performs (Ernst & Young, 2014) .Subsequent to initial recognition, impairment tests should be performed in accordance to IFRS9 or IAS39 on all contract assets and impairment losses needs to be presented in profit and loss. In effect, allowing for reversal of impairment losses would increase the value of contract assets up to the amount not greater than the

As a consultant it is my responsibility to recommend the best direction for a new business to follow in order to be successful in financial documentation. It is very important for a new business/owner to understand the functions of accounting and its’ basic accounting system. Since Accounting Information Systems (AIS) is used to store, collect and process financial information. It would be wise for a new business to know the ins and outs of recording their finances so that they can keep track of their finances to see if they are gaining or losing a profit.

If an intangible asset is not able to meet either of these criteria, it should be recognized as an expense rather than being capitalized to the statement of profit or loss when it incurs. IAS 38 therefore specifically prohibits recognizing internally generated goodwill, customer lists, publishing titles, brands, start-up costs, mastheads and training costs etc.

AASB 138 defines intangible assets as “identifiable non-monetary assets without physical substance”. Such assets include but are not limited to goodwill, trademarks, patents and research and development. AASB 138 Intangible Assets has been implemented to prescribe the accounting treatment for intangible assets that have not been specifically dealt with in any other standard. Therefore, this standard only applies to intangible assets that have not been previously dealt with. Furthermore, it can be established that this standard is an example of normative accounting theories because the standard prescribes what should be done, rather than predicts what people may do. According to AASB 138 Intangible Assets, in order for an asset to be recognised in the financial statements it must meet specific criteria. The required criterion states that the asset must be identifiable, the entity has control of the asset, future economic benefits are probable and the cost of the asset can be measured reliably.

The main concern that needs to be addressed first is the identification of assets and properties, and then the actual worth of their carrying sums, what amount of depreciation is going to be charged on them and recognition of impairment losses related to them. Initial measurement of assets would be done at cost. Cost model consists the original cost of the asset minus the impairment and the depreciation. However IAS 16 has two accounting models. The other one is the Revaluation model. When an asset is measured at revaluation cost it means that is in its Fair value at the date of revaluation less any subsequent accumulated depreciation and less any subsequent accumulated impairment