Will FRS 10 hit the target?

Article Abstract:

The Accounting Standards Board's Financial Reporting Standard 10 on the accounting treatments for goodwill and intangible assets aims to ensure that capitalized goodwill and intangible assets are charged in the profit and loss account in the periods in which they are used up. While the standard can be commended for its emphasis on expense recognition over a balance sheet objective, it contains several controversial provisions. For instance, the provision on impairment review states that goodwill and intangible assets that are not amortized must be subjected to an annual impairment test. In addition, the accounting treatment of negative goodwill is quite strange because it is positioned in the asset account of the balance sheet. Another controversial item of the standard deals with release against the recovery of non-monetary assets.

Accounting Methods, Reporting & Disclosure, Accounting and auditing, Accounting Standards Board, Intangible property, Intangible assets, Financial statements, Corporation reports, Company reports, Goodwill (Business)

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Building the right framework

Article Abstract:

The International Accounting Standards Committee's Conceptual Framework for the Preparation and Presentation of Financial Statements presents a good description of the objectives of accounts but fails to describe how to design accounts to meet these objectives. The framework's discussion of measuring assets, liabilities, income and expenses only mentions that a number of alternatives exist without providing sufficient detail. The authors need to differentiate between alternative accounting approaches and develop rules for examining each individually.

Analysis, Liabilities (Accounting), International Accounting Standards Board, Cost accounting

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