Question
As a graduate accountant, you work for the public accounting firm, Andersen Accountants. One of your clients, West Ltd, is a leading company in the
As a graduate accountant, you work for the public accounting firm, Andersen Accountants. One of your clients, West Ltd, is a leading company in the sale of frozen and canned fish produce. These products are sold under two brand names, 'Antarctic Fresh' (independently valued at $1 million), which is the brand the company developed itself when it commenced operations and is still used today, and 'Tropical Taste', which the company bought recently from another company, Fishy Tales Ltd (at $800,000).
West Ltd would like advice from Andersen Accountants as to whether they can recognise both brands as assets. As a result, the partners of Andersen Accountants have asked you to prepare a background report to address the following:
- Inyourownwords,discussthehistoryofaccountingforIntangibleAssets,specificallybrandnamesbothpriorto,andafter,theadoptionofInternationalFinancialReportingStandards(IFRS).2.Analysethereasonswhy,andtheimpactof,thechangeinaccountingtreatmentforinternallygeneratedintangibleassets,suchasbrands.Refertoatleastfive(5)pertinentreferencesfromresearchers/professionalorganisations/crediblemediainthisareaofaccountingtodemonstratethedebatewhether"tocapitaliseornottocapitalise"internallygeneratedintangibleassets.
Getting started
First explain the accounting treatment before 2005 and then after 2005. State the major differences and how these impact the financial statements and financial ratios.
State how and why managers could use their judgement to account for intangibles in a particular way. Use references to back up what you are saying.
Discussion
Issue 1 - history
2.2 Issue 2 accounting for intangibles (brand names) now with the International Accounting Standards
2.3 Issue 3 impact and reasons for change
- Pretty straightforward here. Use an appropriate topic sentence.
- Maintain coherence by organising information logically
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