Your discussion should address intangible assets (AASB 138) and examine the immediate expensing of all expenditure of the research component of R&D and explain how capitalisation of development expenditure is met.
Advanced Accounting Principles
Accounting for intangibles has been one of the key points of contentions amongst various standard setting bodies and local country specific accounting requirements. Intangible assets like goodwill etc. are treated differently by these bodies and the standards change as per the country. Intangible assets also include the expenses classified under research and development for the research part. As per the latest standards, research costs are expensed and development costs are capitalised. Recently, Australia has also embraced the same international standards for intangible assets accounting. There have been many critics of the international standards who find it to be less ideal than other standards. Hence, the decision by the Australian accounting bodies to accept the same seems more like an attempt to merge with the majority than to apply rational thought and enforce the correct accounting practises for intangible assets. In this report, we would analyse the IASB conceptual framework with regards to the accounting for intangible assets and try to put forward the advantages and disadvantages of the IASB accounting method for intangible assets. The conclusion would be based upon our findings on whether it is advisable for the Australian authorities to use the IASB framework and standard for intangible asset accounting or should it distance itself from the same.