conceptual framework and intangible assets

3. Conceptual Framework and Intangible Assets The IASB's Conceptual Framework, revised in 2018, identifies two fundamental qualitative characteristics that financial information requires to be useful to decision making: relevance and faithful representation. There is, however, a level of trade-off between these two characteristics. Despite internally-generated brands of global companies being worth billions (Apple's brand is reported to be worth $323bn in 2020') these are not allowed to be included as internally-generated assets in the statement of financial position, under IAS 38 Intangible Assets. However, the same assets should be recognised, at fair value, if acquired by another entity under IFRS 3 Business Combinations. Required Discuss whether the qualitative characteristics of the IASB's Conceptual Framework and the two accounting standards, IAS 38 and IFRS 3, meet the needs of the user, given increasing disparities between book values reported in companies' Statements of Financial Position and their market capitalisation (value of their shares in the market). Recommended word count: 750 words (Total 50 marks) 3. Conceptual Framework and Intangible Assets The IASB's Conceptual Framework, revised in 2018, identifies two fundamental qualitative characteristics that financial information requires to be useful to decision making: relevance and faithful representation. There is, however, a level of trade-off between these two characteristics. Despite internally-generated brands of global companies being worth billions (Apple's brand is reported to be worth $323bn in 2020') these are not allowed to be included as internally-generated assets in the statement of financial position, under IAS 38 Intangible Assets. However, the same assets should be recognised, at fair value, if acquired by another entity under IFRS 3 Business Combinations. Required Discuss whether the qualitative characteristics of the IASB's Conceptual Framework and the two accounting standards, IAS 38 and IFRS 3, meet the needs of the user, given increasing disparities between book values reported in companies' Statements of Financial Position and their market capitalisation (value of their shares in the market). Recommended word count: 750 words (Total 50 marks)