This report provides an in-depth analysis of financial accounting practices related to intangible assets, with a specific focus on the impact of AASB 138 (and its international equivalent, IAS 38). The report examines the accounting treatments for both internally-generated and acquired intangible assets, highlighting the key differences in recognition, measurement, and disclosure requirements. It explores how AASB 138 has changed the accounting for these assets, particularly focusing on the restrictions placed on recognizing internally-generated intangible assets. Furthermore, the report discusses the reasons why companies may be hesitant to push for changes in these accounting standards, considering factors such as the potential impact on financial statements and the costs associated with implementing new regulations. The report includes an example of goodwill calculation and concludes by emphasizing the importance of correctly accounting for intangible assets, given their significance to a firm's asset base.
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