Nick Tabakoff (1999) stated: rits of the standard [IAS 38. At the News Corporati

Question

Nick Tabakoff (1999) stated: rits of the standard [IAS 38. At the News Corporation is far from convinced of the merits of the standard [IAS 38]. At the Australian division, News Limited, finance director and deputy chief executive Peter McCourt says: The reason you get standards like that is that they are prepared by people who are not really responsible to anybody. The business community gains nothing from writing off the value of intangibles over a limited time frame. If the standard comes in, the market will simply add back the amortisation McCourt believes the standard penalises companies that are acquisitive when it comes to intangible assets. He can see no reason for the existence of the standard. 'Who is it aimed at, who is being better informed by taking that charge? I don't think it gets you anywhere.

Explanation / Answer

As per the current AASB 138, which is equivalent to the IAS 38 standard states that all the intagible assets with finite useful life should be amortized over its useful life. For the intangible assets with infinite life, the assets will not be amortized but should be checked for impairment. However, these intangible assets should be checked in a period of time if its infinite useful life still exists.

The four key issues in the article refers to the following:

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