Research report on intangibles

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20 Nov 2008

The Australian Accounting Standards Board (AASB) has published Initial Accounting for Internally Generated Intangible Assets, a discussion paper addressing the inconsistent accounting treatments for intangible.

The discussion paper, authored by staff of the AASB, with the encouragement and support of the group of National Standard Setters (NSS), represents a significant step toward encouraging the International Accounting Standards Board to review its existing accounting standards relating to intangible assets. Currently, accounting standards treat intangible assets acquired as part of a business acquisition differently from the same kind of intangible assets that are internally generated. Comments on this paper are requested by 15 May 2009. The AASB intends that comments received on the paper will provide valuable input into any future work on intangible assets that the IASB might initiate. In December 2007, the IASB rejected an agenda proposal on intangibles. Click for:

A key conclusion of the intangibles research report: From a technical conceptual perspective, internally generated intangible assets should be required to be initially measured at fair value to enhance the decision-usefulness of financial reports. An option to adopt cost as an alternative to fair value should not be allowed. On balance, we also think that this view can be justified on practical grounds. However, we acknowledge the views of some against our conclusion. Accordingly, before our conclusion is considered for implementation, we think that further investigation of the perceived practical impediments is warranted.

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