Accounting for Intangibles: Importance and Implications

This report covers contemporary issues regarding the accounting of intangibles, highlighting the importance of intangible assets in modern accounting and the negative consequences of ignoring them. It also discusses the implications of adopting international accounting standards on intangibles for different stakeholders such as accountants, regulators, and investors.

Accounting for
Intangibles

The report has covered the contemporary issues regarding the accounting
of intangibles.
The two articles selected are “The accounting treatment of intangibles
– A critical review of the literature” written by Daniel and Anis (2011) in
Accounting Forum
And “Adoption of International Financial Reporting Standards: Impact on the
Value Relevance of Intangible Assets” written by Keryn and others (2008)
in Australian Accounting Review
Introduction

The articles will help in
identifying the
importance of intangible
assets in modern
accounting world.
The articles will throw
light on negative
consequences of
ignoring it, in the
financial statements of
the organization.
It will help to analyse the
difference between
before and after the
adoption of international
standards on
intangibles.
Reasons for Selecting the
Articles

The study has helped to gain knowledge related to
the increasing investment in the intangibles
Investment in intangibles are considered to be main
value creator of modern economy
Because of the adoption of international accounting
standards, the value creation of intangibles
increases.
Purpose of the Study

Similarities Differences
Both the articles have given
emphasis on the importance of
including intangibles in the
accounting information.
The article by Daniel and Anis
(2011) article purely focuses on
the importance of intangibles and
the negative consequences of
ignoring it.
While article by Chalmers, et al.
(2008) focuses on the value
creation of the intangibles with
the adoption of the International
Accounting Standards
Similarities and
Differences

Accountants in Australian Companies
Article 1-
• Accountants may need to start reflecting information pertaining
to intangibles in the financial statements of the organization. The
criteria mentioned needs to be studied for the treatment of
intangibles
Article 2-
• Adopt the measures released by the International accounting
standards. Accountants will be required to reflect intangibles as
expenditure as well as asset in the balance sheet
Implications on Different
Stakeholders

Accounting Regulators
Article 1-
• Regulatory norms need to be set up in order to give
recognition to intangible assets; regulations need to be made
mandatory and circulated to all the other important regulators
Article 2-
• Regulations developed should be in line with the international
standards; many changes in the regulation may be required
Continued…

Investors
Article 1-
• Stock value of the organization will increase in the market;
investors will be able to analyse the risks and opportunities
related to the organization
Article 2-
• Investors from every corner will find easy to connect with the
company as a common international standard will be adopted;
investors will be able to know the technicalities of the
organization
Continued…

The presence of
intangibles is
increasing in the
modern accounting
world
Despite this fact, it
is being largely
ignored by the
accounting
professionals
In order to give
them importance,
it is important to
adopt the
international
standards related
to the treatment of
intangibles
Conclusion

Thank You