Financial Accounting: Treatment of Intangible Assets, Goodwill and Restructuring Provision

Running head: FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Name of the Student
Name of the University
Author Note

1
FINANCIAL ACCOUNTING
Table of Contents
Question No 1............................................................................................................................2
Question No 2............................................................................................................................2
2A...........................................................................................................................................2
2B...........................................................................................................................................3
Question No 3............................................................................................................................3
3A...........................................................................................................................................3
3B...........................................................................................................................................4
3C...........................................................................................................................................4
Reference and Bibliography.......................................................................................................6

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FINANCIAL ACCOUNTING
Question No 1
AASB 138 states about the treatment of intangible asset in the business. It shows how
an entity should account the intangible asset in their financial report (Aasb.gov.au 2019). As
per para 21 its states about the recognition of intangible asset as an entity should recognise
intangible asset only when it able to generate some future benefits, as well as the entity, can
measure the cost incurred upon the intangible asset.
The profit ascertains with the intangible asset should be assessed by the entity using
supportable and reasonable assumption in their business activities (Aasb.gov.au 2019). An
intangible asset should initially be recorded in cost. In the case of a brand, any expenses
incurred by the entity has to be recorded as a loss in their income statement.
Company has internally generated the brand value than it should be not recorded as an
intangible asset as per para 63 of AASB 138 (Aasb.gov.au 2019). In case of brand or similar
asset there cannot exist of an active market in the business.
The standard has been made for the term brand, and it is not able to distinguish
different brand value, which should be done by the individual with the help of taking proper
assumptions in their business activities.
Question No 2
2A
Goodwill is an intangible asset which means the entity has to follow AASB 136 for
the recognition of the goodwill in the financial statement (Aasb.gov.au 2019). In para 21 of
AASB 136 the criteria of recognition have been stated as an entity can record only when the
asset will able to give income in future years, and the entity can easily calculate the cost