Assignment Intangible Assets

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Added on 2020-02-18

Assignment Intangible Assets

Added on 2020-02-18

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Running head: INTANGIBLE ASSETSIntangible AssetsName of the student:Name of the university:Author note

1INTANGIBLE ASSETSIntangible assets are something that does not possess physical characteristics. Patents,copyrights, trademarks, business methodologies and other such corporate intellectual propertiesare considered as intangible assets. Intangible assets are further classified as indefinite or definiteassets. For example, the brand name of a company is referred to as indefinite intangible assets asits existence is dependent on the operation of the company (Biondi and Lapsley 2014). On theother hand, if the same company goes in an agreement with another company without anyextension, then it becomes a definite asset. As the name suggests, the intangible assets do nothave any kind of physical value of such as factory or equipment but they tend to be valuable fora firm and liable for the success or failure. For example, the brand name of Nestle is not aphysical asset but its business has become successful due to the recognition of its brand name.Although an intangible asset, brand name has a big impact on the sale and profit of Nestle sincetheir establishment. However, if a business creates intangible assets then they do not need towrite that on income tax return but if they attain it then the cost will be considered as capitalexpense (Castilla-Polo and Gallardo-Vázquez 2016). For this essay, it will need to be considered if the intangibles pass the definition andrecognition tests. Assets are the expenditures which are made with an aim of gaining profits andcash flows in future. It is not difficult to differentiate between tangible and intangible assets.Tangible assets are inventories, land and buildings and intangible assets are investments, cash,etc. the assets which are obtained from outside the firm normally have individual costs anddistinct benefits. But difficulty can arise while accounting such assets. Certain costs involvedtend to have inconsistent approaches for recording, amortizing and revaluing of the assets. Theinternally generated intangibles are those that are developed within the firm but they facerecognition problems (Christensen and Nikolaev 2013). They are developed in the internal

2INTANGIBLE ASSETSstructure of the firm, once ignored, is not given proper recognition when it comes to the financialstatements. This negligence is due to the lack of connection between the costs and futurerevenue. Moreover, the issue in directing costs or value of intangibles and preference ofreliability over relevance while discussing asset information demonstrates that self- developedintangibles are not generally recognized. Although the intangible assets existed long ago, butthey were not identified and remained unknown until the creation of value (Crema and Nosella2014). The controversial topic in the contemporary intellectual property right is the amount towhich property rights conception, developed with the association of land and other such tangibleproducts which can be approved to various forms of property as in, the rights in the spectrum andin copyrights or patents. In this essay, it can be explained that if the variations in the minimumduration of copyrights and patents are considered, then the leave of the basic property outsetfrom the tangible to intangible assets should be encouraged (Kanodia and Sapra 2016). There arefew instances, in which the concepts of property rights which are applicable to land can functionbetter for intangible assets because of the complications in the designing of land- based system.If the patent has a short life span then it is an absolute necessity to make rules for handling therestraints on the time- to- time amendment. There are different e- commerce businesses whichhave limited the accessibility of injunction to secure the select rights of patent use. It can benoted that the restrictions on right of alienation in the spectrum leads to key social loss, just likethe use of patent exhaustion rule in the licensing of intellectual property (Lim, Macias andMoeller 2016). The Australian equivalent standard is AASB 138 Intangible Assets which is applicable tothe following Australian interpretations- Interpretation 12 Service Concession Arrangements,

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