Intangible assets have become increasingly noticeable with accounting due to the larger amounts linked to patents, franchises and brands. Although these items are not purchasable they are generated within an organization and sometimes account for huge differences between market capitalization and book values. Over the years, the International Accounting Standards Board has focused on the uniformity of accounting standards. However, these standards will only be appreciated across the board if they are of unquestionable integrity. This implies that the harmonization process must not only consider the benefits associated with the process, but also eliminate. This paper seeks to investigate the capacity of Australia’s accounting standard in meeting the objective of international comparability. This evaluation shall be conducted with a comparison of the IASB conceptual framework qualitative characteristics. Another section will address AASB 138 on intangible assets and evaluate how the immediate expensing of the research part of research and development and how the capitalization of the development expenses is met.
According to the (IFRS, 2010), the IASB conceptual framework was established to assist the board in the promotion of harmonization of the regulatory framework that guides the formulation of accounting standards and the presentation procedures. Therefore, it supports the development of national standards such that all organizations can follow similar rules and regulations. In addition, it assists users to interpret information contained in financial statements. The IFRS further outlines the objectives of the conceptual framework as to definition of the objectives and qualitative characteristics...
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...the IFRS has had deep impacts on the disclosure, measurement and recognition of assets. This was achieved when the AASB (Australian Accounting Standards Board) introduced the Australian parallels of the IFRSs to outline the requirements to Australian businesses. The introduction of the AASB 138 saw the recognition of purchased intangible assets only, as opposed to the inclusion of internally generated ones before its introduction. The board had been guided by the concept that revaluation of intangible assets would be more beneficial than what was practiced earlier. However, at the onset of the introduction of AASB 138, its impact was much lower than it was anticipated. This was because there was no clear distinction between internally generated and purchased assets. Nonetheless, this has improved with better communication between entities and different stakeholders.
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