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Financial Accounting and Reporting - Assignment

   

Added on  2021-06-15

4 Pages679 Words63 Views
Running head: FINANCIAL ACCOUNTING AND REPORTINGFinancial accounting and reportingName of the studentName of the universityStudent IDAuthor note

1FINANCIAL ACCOUNTING AND REPORTINGIAS 38 / AASB 138 on Intangible AssetsAASB 138 - Intangible assets was amended and issued by IASB (Internationalaccounting standardboard). The main objective of the standard is prescribing accountingimplications for intangible assets those are not dealt specifically with any other standard. Asper this standard the company shall recognize the intangible assets if some specific conditionsare met. Further, it also stated the way in which carrying amount of the intangible assets shallbe measured and needs specific disclosures for the intangible assets (Aasb.gov.au, 2018). This standard for intangible assets shall be applicable except –The intangible assets are treated under the scope of any other standard.Measurement and recognition of evaluation and exploration assetsFinancial assets those are defined under AASB 132 for financial instrumentExpenses on extraction and development of oil, natural gas, minerals and similarkind of non-regenerative resources (Axtle-Ortiz, 2013).Definition for intangible assets requires that the intangible assets shall bedistinguishable or identifiable from the goodwill. The asset will be identifiable if –It is distinguishable, that is capable to be divided or separated from the organizationand transferred, sold, exchanged, rented or licensed either along with the relatedcontract or individually, identifiable liability or asset irrespective of whether thecompany intends to or not. Or,Generates from legal rights or contractual rights irrespective of whether the rights areseparable or transferrable from the company or from other obligations or rights(Steenkamp & Steenkamp, 2016). Further, the intangible asset would be recognized if –It is apparent that future economic benefits from the asset will inflow to the companyandThe asset’s cost are able to be reliably measuredThe company shall assess probability of potential future economic profit throughsupportable and measurable suppositions that represents the best estimate by the managementfor the economic scenarios that may remain over the asset’s useful asset.

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