Summary: | Intangible assets have always been a prevailing concept within the economic milieu and
hence in the accounting domain, but it has not been a prominent aspect, or even
regarded as an asset, since the emphasis in the economic environment was invariably
cast on property, production facilities and equipment.
Economic development and progress over the last +I- 30 years have plunged the issue
of intangible assets into the limelight and it has now become a bone of contention in the
doings of the financial accounting operating arena.
One has to look closely at the driving forces of the current economic environment to
grasp the newfound impetus that brought the issue to the fore. The economic
playground of the new millennium has all sorts of toys to toss around, such as
information, innovation, services and relationships. The common denominator among
these driving forces lies in its intangibility.
Users of accounting tools have stumbled across a significant dilemma by raising their
disquietude about the relevancy of financial statements where intangible assets are
concerned. There are resounding claims that intangible assets are not exhibited
accurately in the financial statements of companies.
The general objective of the research project has been to single out certain aspects
concerning the topic of intangible assets and to assert how the accounting fraternity is
dealing with the situation at hand.
The study embraced the following aspects:
*A literature study;
*Empirical research by means of a structured questionnaire that gathered data
about certain identified aspects of intangible assets and measuring how it is
handled by the respondents in the marketplace; and
*Telephonic interviews with key banking officers in the bank sector in South
Africa.
The findings of the questionnaires were used to flag crucial aspects of intangible assets
and to identify the ensuing approach needed to handle intangible assets within the
accounting body of knowledge. The results have shown that the recognition of and
reliably measuring intangible assets have become a dilemma that is, in all probability,
here to stay for a while to come. Users that responded in the empirical study clearly
indicated that the reliable measurement of intangible assets outweighs the relevancy of
information about intangible assets.
On the strength of the results of this study, by word of the users of financial statements,
the recommendation is posed that relevant, additional information regarding intangible
assets should be attached to the financial statements, or that additional notes should be
provided.
Moreover, a supplemental recommendation entails that the classification and the
recognition criteria of accounting standards should be revisited in order to establish
clearer guidelines for the identification and recognition of intangible assets. === Thesis (M.Comm. (Accounting))--North-West University, Potchefstroom Campus, 2006.
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