Many of the largest international firms including Microsoft, Google, Coca Cola and Apple identify substantial intangible assets which may be quite different from the more traditional ‘bricks and mortar’ type organisations including BHP

| August 14, 2017

Many of the largest international firms including Microsoft, Google, Coca Cola and Apple identify substantial intangible assets which may be quite different from the more traditional ‘bricks and mortar’ type organisations including BHP. Technological developments have resulted in intangible assets become an important part for many businesses of all sizes. An important accounting question for any business is whether they are able to recognise intangible assets in terms of AASB 138 and the basis of their measurement after initial recognition.

(a) You are required to electronically access the Annual Financial Report (AFR) of TWO ASX listed companies, one reporting substantial intangibles capitalised (e.g. most radio, television, electronic development and gambling companies) and the other reflecting small proportions of total assets as intangible assets (e.g. retail, mining and construction).

(b) Using the AFRs you have acquired, identify and compare the recognition of and subsequent measurement of ‘Intangibles’ in terms of the ‘AASB Framework for the preparation and presentation of Financial Statements’ and ‘AASB138 Intangible Assets’. (Hint most of this analysis and commentary will stem from the notes – including the note on Intangible assets and the note on Accounting Policies).
You are also required to calculate ratios, to be reported in tabular format, which reflect the ‘before and after position’ of the two firms for two comparative consecutive years (figures that will be available in the annual reports), to reflect the effect of the removal of intangible assets from the financial statements. (Note: the workings should be provided in an appendix.)

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