IASB revamps accounting rules for intangible assets.

TLDR:

• The International Accounting Standards Board (IASB) is conducting a review of accounting for intangibles assets, considering if current standards are relevant.
• The IASB has launched a comprehensive review of accounting requirements for intangibles to address concerns from stakeholders.

Key Elements of the Article:

The International Accounting Standards Board (IASB) has initiated a review of the accounting standards related to intangible assets. This review comes after concerns were raised by stakeholders regarding the relevance of the current standards. The IASB’s review will focus on assessing the adequacy of the existing standard, IAS 38 Intangible Assets, and determining if it accurately reflects the current business landscape. Stakeholders have expressed worries that the standard, developed nearly 25 years ago, may no longer be sufficient to address the complexities of modern transactions and assets.

In response to the IASB’s Third Agenda Consultation, where feedback was solicited on strategic directions and priorities, the ICAEW recommended a comprehensive review of intangibles as a high priority. The ICAEW highlighted concerns regarding scope, accounting discrepancies between internally generated and acquired intangible assets, and challenges in measurement.

The IASB will engage with advisory bodies and stakeholders to shape the project plan. The initial phase will involve defining the project scope and planning the approach for further research. In the UK, the UK Endorsement Board is also investigating ways to enhance accounting and reporting practices related to intangible assets, which will contribute to the international discourse on this topic.

Sally Baker, the Head of Corporate Reporting Strategy at ICAEW, emphasized the importance of evolving accounting standards to reflect the current business environment where intangible assets play a significant role in value creation. The Corporate Reporting Faculty will monitor the project’s progress and share updates with its members.