Accounting Standard AASB138 Intangible Assets Essay

Accounting Standard AASB138 Intangible Assets - Essay ExampleThis means that as very much as possible, no pieces and bits of expenses atomic number 18 to be left out. The collection of every amount that went into spending is mantic to be captured as part of the expenditure development (Deegan, 2012). This also entails a mandate whereby bill for enquiry and development expenses entrust not be done in isolation. Rather, it is expected that the expenses making up for the twain will be integrated as one so as to have a broad(a) aggregate of the expenditure. What is more, the AASB138 requires specific items that cover cost of all internally generated intangible summations to be accounted for (66). These would include cost of materials and services, cost of employee benefits, fees to register a legal right and amortisation of patents and licenses (66, a, b, c). There however exist several(prenominal) freebies as far as items to be covered are concerned as in that location are ent ities that are encouraged but not necessarily required. These include amortised intangible assets that are still in use and intangible assets that did not match up the recognition criteria in the Standard (128). 2 inform the rationale behind the different accounting treatments for research and development expenditures. A critical review of the AASB138 shows that there are different accounting treatments given to alter research and development expenditures. Such differences exist for varying reasons.... Secondly, the tangible impact that different research and development expenditure creates is always different and subject to valued grading (Accounting Scholar, 2012). For this reason, there exists different accounting treatment for research and development expenditures so that accountants would have the opportunity of undertaking their own assessments of the impacts of expenses so as to undertake effective vicenary grading. In the opinion of Deegan (2012), having the selfsame(p renominal) accounting treatments for all research and development expenditures would only be a way of saying that when quantitative grading is done, all entities will be on the same scale (p. 231) 3 Before the interpolation of Accounting Standard AASB 138 Intangible Assets in 2005, Australian companies were allowed to treat research expenditure as an asset and spread the charge against profits over several years. a Examine possible impacts of the introduction of rising accounting standards regarding research expenditures to the key elements of companies fiscal statements such as assets, liabilities, equity, income and expenses. With the coming into force of the new accounting standards on research expenditure, one of the key impacts that is expected in terms of financial statements of companies is that there will be an overall change in the technical structure and setup of their financial statements (Deegan, 2012). For example as the new accounting standards brings into force new definitions and categorisations of key entities like assets and expenditure, it is expected that the overall structure of financial standards will change drastically. In terms of assets, it is expected that companies are going to record comparatively decreased volumes of assets than they