Intermediate Financial Accounting Essay Example | Topics and Well Written Essays - 2000 words

Intermediate Financial report - Essay ExampleInternational Accounting Standard 38 mentions the utility and usage of nonphysicals in the financial aspect of companies. The intangible assets are the intelligent property rights, goodwill and the expenditures of the company on research and developments. They are also known as hood developments. In the second part of the report, the examples of two famous listed Australian companies have been taken. Both of these companies are from pharmaceutic industry. Acrux bound specializes into development of fast-drying sprays and other medicinal products, while Agenix Limited is mainly based in mainland China and has competency in development of biopharmaceuticals. The company is into several agreements with renowned institutions for development, innovation and discovery of useful medicines for the advance of mankind. The management in Acrux Limited considers their intangible assets at the cost price when they were acquired. In case of Agenix Limited the capital development of their research and development on some new drug has been included. Agenix Limited has a larger base of intangible assets than Acrux limited, in terms of financial value. Both the financial statement of both the companies shows that the intangible assets of the companies are well-maintained. ... The best examples of intangible assets in organizations are the goodwill, intellectual property rights such as patents, copyrights, trademarks, brand recognition, etc. There are two types of intangible assets, such as legal and militant intangible assets. The legal intangible assets are the trade secrets such as the patents or copyrights, competitive intangible assets are knowledge or technical know-how. The legal intangible assets are acquired through judicial regulations, besides in case of competitive intangibles, legal regulations are not enforceable (Anson, and Drews, 2007, p. 6). The Uniform Commercial inscribe (Section 9-102 (a) (42)), depicts that intangibles are the personal property. In International Accounting Standard (IAS) 38, it has been mentioned that the legal intangible assets which are internally developed cannot be defined, but if it is acquired from third-party then it can be recognized. While in case of US GAAP, the intangible assets are segregated into internally developed intangibles versus the purchased ones, and the limited life intangibles versus indefinite life intangibles. The authorization economic reimbursement from an intangible asset might comprise of revenue from sale of services or products, scrimping cost, or additional benefits from the usage of assets by the venture. For example, using intellectual property in a twisting development may condense the future tense cost of production rather than the increase in future revenues (Australian Accounting Standards Board, 2008, p. 2-4). Problem Areas The power to create customer value, stakeholders and shareholders value and economic value no longer depends on the production factors, but on intangible assets. These are also considered as the