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External disclosure of information on intangibles is useful only if it is understood and is relevant to investors. It appears that investors are increasingly interested

External disclosure of information on intangibles is useful only if it is understood and is relevant to investors. It appears that investors are increasingly interested in and understand disclosures relating to intangibles. A concern is that, due to the nature of disclosure requirements of AASB standards, investors may feel that the information disclosed has limited usefulness, thereby making comparisons between companies difficult. Many companies spend a huge amount of capital on intangible investment, which is mainly developed within the company and thus may not be reported. Often, it is not obvious that intangibles can be valued or even separately identified for accounting purposes. The current Integrated Reporting Framework may be one way to solve this problem.

(i) Discuss the potential issues which investors may have with: the choice of accounting policy of cost or revaluation models, allowed under AASB 138 Intangible Assets, for intangible assets; the capitalisation of development expenditure.

(ii) Discuss whether integrated reporting can enhance the current reporting requirements for intangible assets.

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