Intangible assets as per IAS 38 Essay Example | Topics and Well Written Essays - 1250 words

Intangible assets as per IAS 38 - Essay Example IAS 38 does not recognize all intangibles as assets and thereby invokes various controversies. Intangible assets are important components of many enterprises. It is stressed that all intangible assets should be treated in a consistent way so that financial statements present really a true and fair view of business and other activities of organizations. Lack of consistent approach erodes the creditability and comparability qualities of financial statements. IAS 38 require a thorough revision because of the under noted reasons. There should be the uniform treatment of all types of intangible assets, whether monetary or non-monetary. There is no answer as to why financial assets have been left out to be recognized by IAS 38. The standard has not treated the recognition of research and development expenses on some logical accounting grounds. When the entire expenditure whether incurred in research phase or development phase is going to bring in future economic benefits to the organizatio n, then why there are two different treatments to expenditure on one particular created asset. IAS 38 does not specify the reasonability of expensing the research expenses and capitalizing the expenses during development stage, when the object of expenditure at both stages is same.