Accounting Standards Board (AASB): Preparation and Presentation of Financial Statements

Running head: COMPANY ACCOUNTING
Company Accounting
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COMPANY ACCOUNTING
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Contents
Part 1:...............................................................................................................................................2
Part 2:...............................................................................................................................................3
References:......................................................................................................................................5

COMPANY ACCOUNTING
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Part 1:
Australian Accounting Standards Board (AASB) has issued mandatory accounting standards
(AASBs) to be followed and complied with the by Australian entities in preparation and
presentation of financial statements of these entities. Non-compliance with the AASBs in
preparation and presentation of financial statements will attract penal provisions as per the
Corporations Act 2001. Corporations Act 2001 is the legislature that governs the affairs and
operations of companies in the country. As per the act the companies operating in Australia are
under compulsion to adhere with the mandatory AASBs issued by the AASB to ensure that the
financial statements of the companies show true and fair picture of their state of affairs and
performance as on the date of such statement (Kabir, Rahman and Su, 2017).
In respect of intangible assets such as brand name, brand value, patent, copyright, goodwill and
other such assets AASB has issued AASB 138. AASB 138, intangible assets must be followed in
recording intangible assets such as brand name, patent, copyright and goodwill in the books of
accounts of an organization. An entity that has recorded intangible assets must also amortize
such assets to comply with the basic accounting principle of matching concept. However, an
entity instead of providing for annual amortization against the value of intangible asset may
decide to conduct periodical impairment test of such asset to provide for impairment loss against
such as asset as and when the impairment loss arises (JENY and Moldovan, 2018).
AASB 136 states that an entity should provide for impairment loss against non-current assets
including intangible assets if there is substantial evidence to suggest that the expected benefit
from the use of such asset or market value of such asset which is ever is higher is still lower than
the amount of book value of such asset. Thus, AASB 136 requires recognition of impairment