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  • The same AASB 136 can also be viewed as a source of inconsistency in financial reporting because the requirements as seen above are not consistent with those of AASB 116 for the tangible assets. Intangible assets may sometimes have value and yet AASB 136 prohibits their revaluation thus setting an unfair ground for intangible asset evaluation. Inconsistency can also be seen in the AASB 136 in that there cannot be a comparison between companies who internally generate their intangible assets and those that buy their assets. The AASB 136 also causes inconsistencies in the financial statements of any particular company, thus it can be viewed as causing inconsistencies.

The same AASB 136 can also be viewed as a source of inconsistency in financial reporting because the requirements as seen above are not consistent with those of AASB 116 for the tangible assets. Intangible assets may sometimes have value and yet AASB 136 prohibits their revaluation thus setting an unfair ground for intangible asset evaluation. Inconsistency can also be seen in the AASB 136 in that there cannot be a comparison between companies who internally generate their intangible assets and those that buy their assets. The AASB 136 also causes inconsistencies in the financial statements of any particular company, thus it can be viewed as causing inconsistencies.

Decision Case Intangible Assets

A tangible asset is defined as those items that have physical substance. An example of such assets is inventory. Intangible assets are not monetary and do not have physical substance such as trademarks, patents and copyrights[ CITATION Mar13 l 1033 ]. There are rules that govern the revaluation of both tangible and intangible assets. According to AASB 116 as a rule sets the ground for revaluation of tangible goods. AASB 138 however, is not as straight forward as AASB 116. This rule sets the basis for the revaluation of only certain intangible assets.

There is a basis for the difference between AASB 116 and AASB 138. The former sets a framework for the revaluation of tangible goods which are by nature of business very easy to distinguish. Intangible assets however, are what make up most of the corporate assets in a company thus they deserve stricter guidelines for revaluation[ CITATION Dav16 l 1033 ]. Under the AASB 138, there are certain intangible assets that can be revalued while some others cannot be revalued, for example, internally generated intangible assets cannot be revalued under AASB 138. Intangible assets are also revaluated only where there is active market which is not the same case where the AASB 116 is involved.

This laws define the difference between a tangible and intangible good where the intangible goods cannot be reinstated even if the future is revealed to be promising of economic benefits once they come under impairment loss. The basis for having these two laws is justified in that they establish a framework for the definition of both tangible and intangible products which are delicate by their nature.

Such a difference does not represent an inconsistency in financial account standards but rather defines the very products by their nature as intangible and tangible. Since intangible products are delicate by their nature, AASB 138 exists to help businesses understand the conditions under which revaluation of intangible products can be done.

The same AASB 136 can also be viewed as a source of inconsistency in financial reporting because the requirements as seen above are not consistent with those of AASB 116 for the tangible assets. Intangible assets may sometimes have value and yet AASB 136 prohibits their revaluation thus setting an unfair ground for intangible asset evaluation. Inconsistency can also be seen in the AASB 136 in that there cannot be a comparison between companies who internally generate their intangible assets and those that buy their assets. The AASB 136 also causes inconsistencies in the financial statements of any particular company, thus it can be viewed as causing inconsistencies.

Works Cited

David BondBrett Govendir, Peter Wells. «An Evaluation of Asset Impairmentsby Australian Firms and Whether they were Impacted by AASB 136.» Accounting and Finance (2016): 259-288. Document.

Marco Greco, Livio Cricelli,Michele Grimaldi. «A Strategic Management Framework of Tangible and Intangible Assets.» European Management Journal (2013): 55-66. Document.