Management Incentives Intangible Assets †MyAssignmenthelp.com

Question: Discuss about the Management Incentives Intangible Assets. Answer: Introduction: The overall assignment mainly focuses in evaluating the intangible assets measurement and recognition requirements that is provided in AASB.Moreover, the evaluation of the intangible assets could mainly help in identifying the relevant measures that needs to be taken by the organisation when enlisting the intangible assets. The relevant accounting standard of the intangible assets are mainly evaluated in the assignment to identify its relevant viability in the financial statement. Lastly, the evaluation of financial report of Wesfarmers is conducted to identify the intangible assets that are being listed in the annual report.This could eventually help in identifying the compliance of the organisation with the relevant intangible asset requirements listed by AASB. The relevant AAAB 138 mainly provides all the relevant information regarding intangible assets, which needs to be evaluated by organisations. The overall AASB 138 directly includes all the relevant information regarding IAS 38, which provides relevant amendments to the intangible assets issue. Hence, the evaluation of the intangible assets Tier 1 directly indicates that profit making entities are liable to use AASB 138 and IAS 38 for the intangible assets (Jin, Shan and Taylor 2015). However, non profit making entities can only use IAS 38 according to the Tier 1 for their intangible assets listing. Hence, under the Tier 2, entities needs to comply with accounting Australian standard, AASB 1053 Australian accounting standard explaining the requirements of all the relevant report preparation (Russell 2017). Relevant recognition of the overall intangible assets could be identified from paragraph 8 of AASB 138, which could directly help in pinpointing the intangible assets of the organisation (Hu, Percy and Yao 2015). The overall intangible assets are identified as resource controlled by an entity as a result of past events and expecting future economic benefits of flow to the entity. Intangible assets valuation is mainly evaluated in by identifying the fair value of the intangible assets if the asset is been sold or transferred to other individual. This mainly indicates that value of intangible assets is many calculated on market rates. Furthermore, the definition that is portrayed in AASB 138 is that all the relevant intangible assets as identified as non monetary asset without physical substance (Steenkamp et al. 2016). The relevant recognition and measurement of the intangible assets in the financial report mainly detected from paragraph 18- 24 in the AASB 138 section. This section mainly includes all the relevant recognition and measurement technique that could be used by the organisation in formulating the annual report (Bugeja and Loyeung 2015). Furthermore, the recognition of an item in intangible assets directly requires the item to meet all the relevant definition of intangible assets. Moreover, the recognition criteria also need to be fulfilled to identify the Asset as intangible for the organisation. Relevant recognition of the intangible assets could mainly be conducted from paragraph 19 of AASB 138, which directly indicates that all the relevant paragraph 25-32, 33-43, 45-47, 48-50 and 51-67 provide information regarding intangible asset recognition. The relevant information provided in the above mentioned paragraph directly allows the organisation to recognise the intangible assets and a ccordingly present it in their annual report. The overall paragraph also indicates the initial recognition and measurement that could directly allow the organisation to identify the asset as intangible (Bond, Govendir and Wells 2016). Moreover, use of paragraph 20 directly indicates all the nature of intangible assets that would be identified from annual reports. From the overall evaluation it could be identified that Intangible assets does not have any kind of additions conducted from previous fiscal years. This mainly depicts the nature of the intangible assets, where future economic benefits are embodied in existing intangible assets. Moreover, the overall nature of the intangible assets can be identified from paragraph 20, which directly in the different types of measures that need to be maintained by your organisation while listing intangible assets in their annual report (Lodh 2016). With the help of paragraph 21, relevant recognition of intangible assets could be identified, which could directly help in adequately listing the asset in the annual report. There is relevant depiction about intangible assets, which is probably expected to provide future economic benefits to the entity. Furthermore, intangible assets relevant cost can be measured reliably which could directly allow the organisation for effectively preparing their annual report. Moreover, the paragraph 22 also indicates the relevant measures that need to be evaluated by the entity. Reasonable and supported assumptions regarding the benefits provided from and intangible assets would be evaluated by the organisation. Thus, estimation of the overall economic condition and useful life directly allows the organisation to identify viability of the intangible asset (Aasb.gov.au 2017). Lastly, the use of paragraph 23 and 24 directly helps in Portraying the overall recognition and measurement of intangible assets in the overall annual report. Paragraph 23 directly states the relevant judgement where degree of certainty that needs to be attached to the future economic benefits provided from the intangible assets. This recognition could directly help in generating the relevant benefits, which could improve profitability of the organisation. Moreover, under paragraph 24 it is directly stated that intangible assets will be measured at initial cost, which needs to be maintained by profit making organisation. However, in case of non profit making entities the overall acquiring cost is a relatively zero. This directly Forces the organisation to evaluate the intangible assets at fair value to the date of acquisition. Hence, the overall AASB 138 directly provides all the relevant method of recognition and measurement that needs to be conducted on intangible assets by the org anisation (Aasb.gov.au 2017). Reviewing the financial statement of Wesfarmers and identifying the relevant intangible assets listed in their financial report: The evaluation of the annual report of Wesfarmers directly indicates that the organisation complies with all the relevant AASB rules that is imposed by the Australian authorities. Furthermore, the evaluation also indicates that all the relevant intangible assets of the organisation are visibly listed in the annual report (Yao, Percy and Hu 2015). This directly helps in identifying the intangible assets of Wesfarmers, which is been conducted by the organisation in their annual report. Relevant section in the annual report of Wesfarmers could be identified, which might help in detecting the recognition and measurement of the intangible assets. In page 102 relevant recognition and measurements method has been provided by Wesfarmers in their annual report (Wesfarmers.com.au 2017). Relevant recognition and Measurement about Goodwill is been provided in the annual report, which directly helps in depicting the combination of goodwill at cost. First measures of the organisation are relatively detected as net fair value that is identified from assets liabilities and contingent liabilities (Carvalho, Rodrigues and Ferreira 2016). Furthermore, the Goodwill is calculated by deducting the cost of accumulated impairment losses generated by the organisation. The Goodwill of Wesfarmers has relatively declined from 14,706 million in 2015 to 14,448 million in 2016. This is in compliance with the overall laid down rules of intangible assets in AASB 138, where intangible assets of the organisation needs to decline from their actual cost (Aasb.gov.au 2017). Relevant measures regarding intangible assets are also evaluated in the annual report of Wesfarmers, which directly helps in detecting the current intangible assets of the organisation. In accordance with the AASB 138, Wesfarmers adequately drives the cost of intangible assets and determine the relevant fair value from the date of acquisition (Bugeja and Loyeung 2017). This directly allowed your organisation to recognise the adequate intangible assets. however the relevant amortization and impairment loss as a deducted from the intangible assets to detect the actual intangible assets of the organisation for the current fiscal year. Recurrent intangible assets of the organisation rose from 4,601 million in 2015 to 4,625 million in 2016 (Wesfarmers.com.au 2017). Conclusion: The evaluation of the overall assignment directly helps in identifying the viability of Intangible assets that needs to be evaluated by the organisation in the annual report. Furthermore, relevant recognition and measurement methods of intangible assets depicted in AASB 138 are mainly evaluated in the overall assignment. In addition, relevant evaluation of Wesfarmers annual report is been conducted, which could directly help in identifying the compliance of the organisation towards AASB 138. Hence, the evaluation directly helped in identifying the compliance that is used by Wesfarmers in drafting their overall financial report. The company has complied with the entire AASB 138 rule regarding intangible assets in their annual report. Reference: Aasb.gov.au. (2017). [online] Available at: https://www.aasb.gov.au/admin/file/content105/c9/AASB138_08-15_COMPoct15_01-18.pdf [Accessed 28 Sep. 2017]. Bond, D., Govendir, B. and Wells, P., 2016. An evaluation of asset impairments by Australian firms and whether they were impacted by AASB 136.Accounting Finance,56(1), pp.259-288. Bugeja, M. and Loyeung, A., 2015. 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Russell, M., 2017. Management incentives to recognise intangible assets.Accounting Finance,57(S1), pp.211-234. Steenkamp, N., Steenkamp, N., Steenkamp, S. and Steenkamp, S., 2016. AASB 138: catalyst for managerial decisions reducing RD spending?.Journal of Financial Reporting and Accounting,14(1), pp.116-130. Wesfarmers.com.au. (2017).Home. [online] Available at: https://www.wesfarmers.com.au/ [Accessed 28 Sep. 2017]. Yao, D.F.T., Percy, M. and Hu, F., 2015. Fair value accounting for non-current assets and audit fees: Evidence from Australian companies.Journal of Contemporary Accounting Economics,11(1), pp.31-45.