Intangible Assets Essay -- Business, Accounting

INTRODUCTIONAccording to Yales School of Man epochment Robert Swieringa (1997), We come to an age of technology, information, and global competition with a financial scoreing model that was forge almost 100 years ago. That same accounting model continues to sprout today. One atomic number 18a in particular is with accounting for intangible assets.In the business sector, assets argon important economic resources and are classified as either tangible or intangible. Tangible assets are easily seen as physical objects that include items such as buildings, machinery, vehicles, and fixtures. Because of their nature, tangible assets are foursquare accounted for on financial statements. However, intangible assets cannot be seen and when it comes to accounting for them, a major issue that has plagued the business world for m both years is how to recognize and account for them (Hadjiloucas and Winter, 2005). What this says is that the financial statements of one company will look di fferent in another territory using their accounting practices. With that said, this paper will turn up how intangible assets are currently viewed and accounted for as well as any changes to the accounting model.INTANGIBLE ASSETSIntangible assets can no longer be overlooked. Eighty percent of the market value of public companies is made up of intangible assets (Osterland, 2001). In fact, the Harvard Management Update (2001) points out that the value of intangible assets, on average, has become three times greater than physical assets. bill issues related to intangible assets dupe always been present, but now these issues are being moved to the forefront. Despite the many years that businesses and regulating bodies have wrangled with the nature of... ... agreed deal. Furthermore, both U.S. generally accepted accounting principles and IFRS expense internally generated assets. IAS 38 differentiates between research and development and all cost pertaining to research are expe nsed as they are incurred. However, any costs seen during development are completely capitalized when a firm demonstrates that certain criteria are met. As a result, concord to Hadjiloucase and Winter (2005), after an acquisition any profits under U.S. GAAP take an immediate hit, while profits under IFRS take a few years to smooth over.In comparison, under U.S. GAAP, any costs that are internally generated are not capitalized unless a specific rule requires it. An example of this would be with the development of parcel. Under U.S. GAAP, software can be distinguished between software that is developed for sale to third parties and software that is developed for internal use.