Analysis of Intangible Assets in Financial Accounting - BAP62

This report provides an overview of intangible assets, including their characteristics, valuation methods, and accounting treatment. It discusses the legal aspects and revenue-generating capabilities of these assets, differentiating them from tangible assets. The report examines the valuation process, focusing on the initial cost, impairment tests, and amortization. A case study of AGL Energy Limited is included, analyzing their intangible assets over a five-year period. The analysis highlights the growth of intangible asset valuation and its positive implications for the company's profitability. The report concludes with a summary of key findings and insights into the role of intangible assets in financial accounting and business performance.

Accounting for
Intangibles

Introduction
Intangible asset is referred to as the asset which is not
physical in nature. The examples of the intangible assets
are the patent, copyright, trade mark are the intangible
assets. The brand name of a company falls under the
category of the indefinite intangible assets as it depends
on the performance of the company. The agreement in
this case is limited and classified into a definite asset.

Characteristics of Intangible Assets
• Intangible assets are able to generate revenue on their own
terms.
• They are applicable for the legal transfer of ownership and
legal enforcements.
• The assets in this case are able to generate the cash flow,
profits and additional resources in the business.
• They can further be separated from the underlying assets.
• The capital assets in this case are carried over to the
expenditures which are incurred recently.

AGL Energy Limited Intangible Assets
• The chart shows the performance of the intangibles assets
of AGL Energy Limited for the last 5 years of operation.

Valuation of Intangibles
• Intangibles are further recorded at cost which is reported at
the end of the accounting period.
• The intangible cost further includes the cost of acquisition
along with the intangibles which are needed to be
purchased.
• The impairment test of the asset indicates the book value
of the assets which cannot be recovered later.
• The residual value in this case is considered as zero and
the amortization of intangibles takes place.

Conclusion
From the above discussion it can be concluded that in
case of the evaluation of Intangibles the AGL energy
limited is that the intangible valuation for the last three
year have grown accordingly. This is further a good sign
for the company in order to enhance the profitability along
with the production of the business.