Financial Accounting and Organizational Change

Question: Discuss about the Financial Accounting and Organizational Change. Answer: Introduction: The revelation of an asset is very necessary for accounting and is one of the necessary components to be maintained while doing the bookkeeping for some company. According to International Accounting Standards, a disclosure of Intangible Assets is coming under IAS 38 Intangible asset. Intangible Assets will be outlining the necessity of accounting regarding intangible assets (Khokan et al., 2014). Intangible Asset is identified as the non monetary assets that are recognized as without physical existence. Intangible assets will be meeting the criteria of specifically identified area where the cost will be measured primarily and then with the help of revaluation model as well as amortization will be done by useful live of the asset. IAS 38 was revised on March 2004 and will be applicable only in the combination of the business, which has occurred on and after 31 March 2004. The main objective of IAS 38 is only for the incorporation of an intangible asset in the treatment of account, which is not dealing only with IFRS. The accounting standard needs an entity for identifying an intangible asset only if a particular criterion is met. The accounting standards will also mention the amount for measuring the amount of intangible asset as well as disclosing the amount related to intangible assets (Aasb.gov.au.2016). Australia and New Zealand Bank From the annual report of the Australia and New Zealand (ANZ) Bank, it has been analyzed that there is an increase of intangible ass0et, as compared to previous year. ANZ bank is using IAS 38 rules for the incorporation of int.0angible assets in its financial statement. The goodwill of ANZ bank mainly comprises because of the goodwill purchased in the acquisition of NBNZ Holdings Limited in the year 2003 and ANZ Wealth Australia Limited. The recovery of CGU is done in every element of goodwill component is to be allocated for estimation, through the approach of market multiple representing the fair value of deduction in the Disposal of CGU. The multiples of price earnings are based on observed multiples for the reflection in the market and business for which CGU is operating. The earnings will be because of present forecasting division in the earnings. The fair value aggregate is computed, as disposal of the cost of the group will be compared to the market capitalization of the group for the validation in the conclusion for the goodwill, which will not be impaired. One of the main assumption that management is based on the determination of fair value minus disposal cost, which is included in the assumptions, it is because the market multiple will be reflected in the business segment for achieving forecasting in the earning. In the recent year accumulated depreciation and cost were decreased for eliminating assets in the net book value which is no longer in use, for doing the comparison for the information adjusted (Anz.com.2016). Amortization and depreciation are including freehold and leasehold land and buildings, improvement of the leasehold, furniture and equipment and technology equipment. Intangible assets are also coming under the list of some ordinary shares. The intangible net asset is equal to share capital and reserves will be attributable to the shareholders in the group after deducting preference share capital and intangible assets, which are unamor tized. From the accounting, the perspective, fair value of the intangible asset is not disclosed for covering the instruments. In tier 1, of IAS 38, the explanations are done related to profit entities of the intangible assets. It widely depends on the application of the non profit component given in the additional guidance of included in IAS 38. ANZ banking is bringing new approach for facing the challenges in the banking sector. Similarly finding a new process to attract customers in an effective way, the banking company is putting its best effort delivering its services in the coming year. It will also help in enabling the approach of a shareholder for long and high return in the future year (Guthrie and Pang 2013). BHP Billiton In the annual report of BHP Billiton, it is focusing on the accounting standards of IAS 38 Intangible asset. BHP Billiton is a huge mining company. Some key assumptions are for oil and gas are the forward price curves and long term view of the potential external sources. Prices are adjusting the arrival of consistent pricing in the market. Goodwill of the BHP Billiton has decreased as compared to the prior year. Goodwill is allocated to different reporting segments. In BHP Billiton IAS 38, is also recognizing the aggregate amount of needed for research and development as well as in the information of intangible asset. The description is said to be the amount left in the process of amortization time (Zhuang 2016). Details related to any prohibition will be depending on the heading of intangible assets and security pledge in the company. This is the amount of the commitments of contractual related to the acquisition of the intangible assets of BHP Billiton. Even AASB 136 is giving th e intangible assets for specific useful lives for the amortizing purpose and impairment test of the assets of BHP Billiton. It is also being reveled that useful live of asset and auditing of every period. Intangible assets of BHP Billiton will have Physical substance according to the Accounting Standard. The assets that are underlying can be both intangible and tangible for the obligation of the lease in the finance. Acquisition of the goodwill is coming under the head of AASB 3 Business combination. The goodwill that is under intangible asset of the BHP Billiton will be attributable with the differentiation of goodwill. BHP Billiton does not show a good position in respect of intangible asset but under the head of goodwill. Goodwill of BHP Billiton has truly fulfilled the accounting standards as per the AASB. Identified intangible asset is recognized in the attributable part of goodwill. Identified goodwill of the company is coming as income of the business with the representation of economic benefits. Disclosure of intangible asset in the financial statement of BHP Billiton plays a vital role (Bhpbilliton.com.2016). Reference list Aasb.gov.au. (2016).Australian Accounting Standards Board (AASB) - Home. [online] Available at: https://www.aasb.gov.au/ [Accessed 21 Sep. 2016]. Anz.com. (2016).Personal - Online Banking | ANZ. [online] Available at: https://www.anz.com [Accessed 21 Sep. 2016]. Bhpbilliton.com. (2016).BHP Billiton | A leading global resources company. [online] Available at: https://www.bhpbilliton.com/ [Accessed 21 Sep. 2016]. Guthrie, J. and Pang, T.T., 2013. Disclosure of Goodwill Impairment under AASB 136 from 20052010.Australian Accounting Review,23(3), pp.216-231. Khokan Bepari, M., F. Rahman, S. and Taher Mollik, A., 2014. Firms' compliance with the disclosure requirements of IFRS for goodwill impairment testing: Effect of the global financial crisis and other firm characteristics.Journal of Accounting Organizational Change,10(1), pp.116-149. Zhuang, Z., 2016. Discussion of An evaluation of asset impairments by Australian firms and whether they were impacted by AASB 136.