Understanding AASB 138/IAS 38 for Financial Accounting

Running head: Financial Accounting
Financial Accounting
Name of the Student
Name of the University
Author Note

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Financial Accounting
Executive Summary
The report deals with the AASB 138/ IAS 38 as it show how the company should deal with
the intangible asset and what are the related disclosure which the company should give in the
financial statement. It deals with the company Technology Enterprise and show they should
deal with the intangible asset as they have done the research upon the modification of the
battery and it become successful so the company should know how to deal with the intangible
asset and how it should value the same in the financial book of the company.

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Financial Accounting
Table of Contents
Introduction................................................................................................................................2
Reduction of Comparability of Financial Statements................................................................5
Understanding of AASB 138/ IAS 38........................................................................................6
Conclusion..................................................................................................................................7
Reference....................................................................................................................................8

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Financial Accounting
Introduction
Financial accounting is the process which keeps the records of the company financial
activities. It is that whether the transaction of the company is been recorded per the
prescribed standard or not. It check whether all the entry are been done in a proper and
systematic manner. As per the given case of the company it should check all the necessary
accounting standard while making the treatment of the intangible asset of the company. The
accounting principles should also be checked by them at the time of doing any entry as per
the intangible asset is been concern (Aasb.gov.au 2019.). As they should also take into
consideration the cost of research and development related to the intangible asset in the
business. AASB 138 is related to intangible asset and the company situated in Australia have
to follow this standard while dealing with the intangible asset of the company. This standard
also apply to the research and development cost which is been there in the intangible asset.
As per the case study is been concern it can be seen that it show that the company name
Technology Enterprise Ltd had undergone into research and development for the purpose of
doing some modification upon the method of recharging the batteries (Arrighetti, Landini and
Lasagni 2015). The report is basically will be upon how the company had done the treatment
related to the expenses which there done by the company Technology Enterprise Ltd so that it
can make a proper accounting treatment for the same. The treatment which is been given by
the company will be from the paragraph of IAS 38/AASB 138.
Accounting for the Project
The technique that is to be used by the company management for the valuation of the
project is by following present value approach as this will help the company to know the
present value of the project which the company will get form the project (Bianchi 2017). It
means what amount of the return the company will able to get from the project. In the given