Recognition of Intangible Asset Literature & Language Coursework (Coursework Sample)

Recognition of Intangible Assets
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Recognition of Intangible Asset
Intangible assets are non-monetary assets that are identifiable and do not exist physically. As stipulated in the International Accounting Standards Board (2020, IAS 38 Intangible Assets, 8), an intangible asset must have three essential attributes. First, the asset must be identifiable; that is, the asset must either be separable or arise from legal contracts. Second, the assets must be able to generate material benefits to the organization, either as cash or cash equivalents. Lastly, the asset must be a resource controlled by an entity. A typical example of an intangible asset that has all three attributes is patented technology. This definition of an intangible asset is in line with the Australian accounting policy spelled out in the Australian Accounting Standards Board (2016, AASB 138). Although most of the Australian accounting policies on intangible assets are consistent with the global accounting standards given in IAS 38 Intangible Assets, some sections, particularly on the recognition and measurement of the internally generated intangible assets, have faced fierce criticism and sparked a constant debate in the financial sector.