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Aasb 5816

The document discusses how the adoption of AASB 138 Intangible Assets in Australia impacted reported intangible assets and key financial measures compared to expectations. While intangible assets and debt to equity ratio were expected to change significantly under AASB 138, only the debt to equity ratio saw a significant change in reported results. Reasons for the differences in expected and actual changes are considered.

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Rajshekhar Bose
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33 views1 page

Aasb 5816

The document discusses how the adoption of AASB 138 Intangible Assets in Australia impacted reported intangible assets and key financial measures compared to expectations. While intangible assets and debt to equity ratio were expected to change significantly under AASB 138, only the debt to equity ratio saw a significant change in reported results. Reasons for the differences in expected and actual changes are considered.

Uploaded by

Rajshekhar Bose
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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On the basis of information available in the 2004/05 annual reports, this paper projects the expected

effects of AASB 138 on reported intangible assets and on key financial measures. It compares these
projected measures to the realised measures, reported under both Australian GAAP and AIFRS in the
2005/06 reports. While reported intangible assets and the debt to equity ratio were expected to change
significantly as a result of AASB 138, the reported AIFRS results show a significant change in only the
debt to equity ratio. The paper considers reasons why the pre-adoption expected changes did not
eventuate, and also how the actual changes were reported to stakeholders in the management
discussion sections of the annual reports. The conclusion draws implications regarding the transparency
of communication in annual reports. AASB 138 Intangible Assets, adopted by reporting entities in
Australia for annual reporting periods beginning on or after 1 January 2005, required derecognition of
internally generated intangible assets. Prior to its adoption, the standard was widely expected to have a
substantial impact on the reports of affected listed entities  Focusing on recognition rules for intangible
assets, Cheung, Evans, and Wright (2008) report that IFRS rules for intangible assets (IAS 38/AASB 138) are more
stringent than previous Australian GAAP rules and that firms have consequently had to de-recognize a significant
portion of intangible assets following IFRS adoption. Hsu and Pourjalali (2015) examine the effect of adopting IAS 27
(Consolidated and Separate Financial Statements) on stock markets' ability to predict earnings. ...

... It also makes it a particularly interesting setting to test the effects of IFRS on private firms and the overall
economy. Examples of studies that have used the Australian setting are those by Chalmers et al. (2011a, b), Cheung
et al. (2008), De George et al. (2013, Jones and Higgins (2006), and Lai et al. (2013). ...

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