Non-recognition of internally generated brands: implications for the usefulness of financial statements
International Accounting Standard 38 (IAS38) prohibits the recognition of internally generated brands as assets. This article explores the implications of this prohibition for the usefulness of financial statements, focusing on the implications for note-disclosure. A theoretical doctrinal research a...
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| Format: | Article |
| Language: | English |
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AOSIS
2015-12-01
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| Series: | Journal of Economic and Financial Sciences |
| Subjects: | |
| Online Access: | https://jefjournal.org.za/index.php/jef/article/view/123 |
| _version_ | 1811329070366982144 |
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| author | Pieter Van Aardt Van Der Spuy |
| author_facet | Pieter Van Aardt Van Der Spuy |
| author_sort | Pieter Van Aardt Van Der Spuy |
| collection | DOAJ |
| description | International Accounting Standard 38 (IAS38) prohibits the recognition of internally generated brands as assets. This article explores the implications of this prohibition for the usefulness of financial statements, focusing on the implications for note-disclosure. A theoretical doctrinal research approach is taken in which the literature on intangible assets and current accounting standards is examined and evaluated. The article highlights the information content relevant to unrecognised brand assets that is not currently disclosed to users of financial statements. Furthermore, the article argues and explains how this situation may compromise the usefulness of financial statements. Practitioners compiling financial statements may find the conclusions and recommendations useful in improving voluntary note-disclosure when a reporting entity owns significant unrecognised brand assets. The International Accounting Standards Board (IASB) may find the article useful in reviewing IAS38’s mandatory note-disclosure requirements in order to improve the usefulness of financial statements. |
| first_indexed | 2024-04-13T15:37:19Z |
| format | Article |
| id | doaj.art-2a0d346436c54c8ca9f55fbc1ed5c628 |
| institution | Directory Open Access Journal |
| issn | 1995-7076 2312-2803 |
| language | English |
| last_indexed | 2024-04-13T15:37:19Z |
| publishDate | 2015-12-01 |
| publisher | AOSIS |
| record_format | Article |
| series | Journal of Economic and Financial Sciences |
| spelling | doaj.art-2a0d346436c54c8ca9f55fbc1ed5c6282022-12-22T02:41:14ZengAOSISJournal of Economic and Financial Sciences1995-70762312-28032015-12-018310.4102/jef.v8i3.123120Non-recognition of internally generated brands: implications for the usefulness of financial statementsPieter Van Aardt Van Der Spuy0School of Accountancy, University of StellenboschInternational Accounting Standard 38 (IAS38) prohibits the recognition of internally generated brands as assets. This article explores the implications of this prohibition for the usefulness of financial statements, focusing on the implications for note-disclosure. A theoretical doctrinal research approach is taken in which the literature on intangible assets and current accounting standards is examined and evaluated. The article highlights the information content relevant to unrecognised brand assets that is not currently disclosed to users of financial statements. Furthermore, the article argues and explains how this situation may compromise the usefulness of financial statements. Practitioners compiling financial statements may find the conclusions and recommendations useful in improving voluntary note-disclosure when a reporting entity owns significant unrecognised brand assets. The International Accounting Standards Board (IASB) may find the article useful in reviewing IAS38’s mandatory note-disclosure requirements in order to improve the usefulness of financial statements.https://jefjournal.org.za/index.php/jef/article/view/123internally generated brandsInternational Accounting Standards Board (IASB)The Conceptual Framework for Accountingtrademarksasset recognitionvoluntary disclosure |
| spellingShingle | Pieter Van Aardt Van Der Spuy Non-recognition of internally generated brands: implications for the usefulness of financial statements Journal of Economic and Financial Sciences internally generated brands International Accounting Standards Board (IASB) The Conceptual Framework for Accounting trademarks asset recognition voluntary disclosure |
| title | Non-recognition of internally generated brands: implications for the usefulness of financial statements |
| title_full | Non-recognition of internally generated brands: implications for the usefulness of financial statements |
| title_fullStr | Non-recognition of internally generated brands: implications for the usefulness of financial statements |
| title_full_unstemmed | Non-recognition of internally generated brands: implications for the usefulness of financial statements |
| title_short | Non-recognition of internally generated brands: implications for the usefulness of financial statements |
| title_sort | non recognition of internally generated brands implications for the usefulness of financial statements |
| topic | internally generated brands International Accounting Standards Board (IASB) The Conceptual Framework for Accounting trademarks asset recognition voluntary disclosure |
| url | https://jefjournal.org.za/index.php/jef/article/view/123 |
| work_keys_str_mv | AT pietervanaardtvanderspuy nonrecognitionofinternallygeneratedbrandsimplicationsfortheusefulnessoffinancialstatements |