Recognition and Measurement of Intangibles Generally and of Brands in Particular Essay

Q: Discuss the difficulties relating to the recognition and measurement of intangibles generally and of brands in particular. Refer to the example in Enigma plc in your discussion. According to IAS 38, an intangible asset defines as â€Å"an identifiable, non-monetary asset without physical substance† including brand, computer software, patents and copyrights. As this typical asset has no physical substance, it is really difficult to recognize and measure it. This essay mainly aims to explain the difficulties to recognize and measure generally intangible assets especially the brand and some analyze refer to the Enigma example will be shown. An item cannot be an intangible asset unless it is an asset in the first place, that is to say the intangible assets should meet the definition of the asset based on IASB Conceptual Framework which contains three main criterions: control, future economic benefits and identifiable (Sacui and PrediÈ™can, 2011). Therefore, whether the item meets the three criterions are the first requirements and the difficulties to recognize an intangible asset. Firstly, the identifiable of an asset is that â€Å"it is capable of being separate or divided from the entity and sold, transferred, licensed, rented or exchanged† (IAS38). So as the intangible assets, it also should be separable from the entity or other rights and obligations. However, the intangible assets are lack of physical substance, the requirement of â€Å"identifiable† is one of the difficulties the entities will meet. Then the accountancy standards require that the company must be able to control the item’s future economic benefits. At last, there must be an expectation of future economics and the intangible assets should be capable of attributing directly or indirectly to future net cash flow (Sacui and PrediÈ™can, 2011). Without selling the intangible asset, it is nearly impossible to determine whether the future cash flow mainly due to the intangible assets or the operating activities. Furthermore, there are still some more requirements should be met when an item will be recognized as an intangible asset, such as without physical substance, be non-monetary and be able to be measured reliably. Considering the brand, it is protected by the trademark law and can only be recognized as intangible assets if they comply with the assets definition. If the brand is acquired in a separate transaction, just like the Enigma example, the Enigma Company spent 7million purchasing the Variations brand, the price that has been paid for the brand is one of the evidence that the brand can be controlled effectively and the future economic benefit will flow to the enterprise. In addition, the cost of the brand usually can be measured reliably and in this case it is 7million. So the brand which was purchased separately in this accounting period has met the recognition requirement and can be treated as an intangible asset. What is more, there is another way to purchase the brand though the business combination. Under this circumstance, the cost of brand is the fair value on the date of the acquisition (Melville, 2011). Furthermore, the fact price that has been paid for the brand is treated as a reflection that economic benefit is expected to flow to the entity in the future. To sum up, the brand acquired in a business combination satisfied the requirements and also can be classified as an intangible asset. However, it is really difficulty to decide whether the internally generated intangible assets meet the general requirement for recognition. Moreover, the IAS38 states that internally generated brand shall not be recognized as an asset. It is mainly because the expenditure on internally generated brands cannot be distinguished from the cost of developing the business as a whole and the problem of establishing whether the item is an identifiable asset which will generate future economic benefits (Melville, 2011). As in the Enigma example, the 3 million marketing expenditure on Enigma’s internally generated brand is recognized as an expense in the 2012 comprehensive income statement instead of an intangible asset which meets the requirement of prudence. After initial recognition, the IAS38 permits the entities to choose between the â€Å"cost model† and the â€Å"revaluation model† to measure the brand. In the cost model, the intangible assets are carried at cost less accumulated amortization and accumulated impairment losses (Austin, 2007). In this case, the company needs to decide the intangible asset’s useful life objectively and choose a proper method to amortize the intangible assets. While the revaluation model measure intangible assets at a revalued amount. According to IAS38, the fair value of intangible assets must be estimated by reference to an active market in that kind of assets. Therefore, if the brand doesn’t have an active market, the recent price cannot be treated as a fair value and the revaluation model should not be applied to it as well. Compared with the tangible market, such as houses, inventories and machines, the intangible market is imperfections (Alali and Cao, 2010). Therefore, it is difficult to get a fair market value for the enterprises to use or reference at any time they need, especially the brand. The brand is a typical intangible asset whose price will change dramatically when a small scandal occurs. So when using revaluation model to measure a brand, the market is particularly important. Before considering the subsequent measurement, the intangible assets should be determined the length of useful life. Intangible assets with finite useful life will be amortized in the following years; however, intangible assets with infinite useful life will not (Melville, 2011). In general, the IASC claims that the useful life of an intangible asset is not longer than twenty years. While if there is no foreseeable limit to the period over which the brand is expected to generate net cash flow for the enterprise, the useful life of brand can be treated as indefinite (Austin, 2007). That is to say, how to decide the useful life for a brand is another problem that a company will meet in the future. Thinking about the Enigma example again, as it says no depreciation has yet been charged on any non current asset for the 2012, we assume that the Enigma plc use the revalued model to measure the brand. Then the company should make the revaluation with sufficient regularity to ensure that the carrying amount of the brand does not differ materially from fair value. In addition, if the Enigma plc chooses the cost model, the useful life of the brand and the amortization policy should be determined by the managers and we may have an accumulative amortization in our statement of financial statement. To sum up, as a special kind of assets, the intangible assets have so many typical characters and difficulties to recognize and measure, such as lack of mature market for intangible assets, hard to decide its useful life and relevant expense. In this case, we should treat this kind of assets more carefully. Reference: 1. Sacui, V. and PrediÈ™can, M., 2011. The intangible assets investments characteristics and the accounting treatment. Annals of the University of Oradea, Economic Science Series. 2. Melville, A., 2011. International Financial Reporting, Third Edition, FT Prentice Hall. 3. Austin, L., 2007. Accounting for Intangible Assets, University of Auckland Business Review Autumn. 4. Alali, F. and Cao, L., 2010. International Financial Reporting Standards – Credible and Reliable, Advances in Accounting, Incorporating Advances in International Accounting 5. Austin, L., 2007. Accounting for Intangible Assets, University of Auckland Business Review Autumn.

Colonial History of Mali

Colonial History of: Mali Mali started out as part of The Ghana Empire which was dominated by the Soninke people up until 1203 when it was taken over by an anti-Muslim Sosso Kingdom. The Mali Kingdom took over from 1230 – 1600 this empire had a lot of influence over West Africa; it began to weaken in the 14th century and was challenged by the Songhai Empire. The two empires ruled over Mali until they were defeated by the Moroccan Saadi Dynasty who controlled parts of Mali until they were challenged by other Kingdoms and this led to Mali falling under many different Kingdoms until it was colonized by the French in 1892.France had taken over most of West Africa at the time and it named the territory taken over in Mali as the French Sudan and appointed civilian governors even though they did appoint a civilian as governor there was still a lot of opposition to French rule. By 1958 French Sudan was renamed to the Sudanese Republic and obtained complete internal autonomy and joined the French Community which meant it supplied labor to French colonies and was given full assistance by France.In 1959 Sudanese Republic was renamed again to the Federation of Mali, one year later the France to let the Federation of Mali to be fully independent, and on 20th of June 1960 the Federation of Mali became fully independent and Modibo Keita was named its first President. After Keita was made President he wanted to move to a more socialist policy which led him to withdraw from the French Community and he decided to have close ties to the Eastern Bloc.In 1967 Mali was forced to rejoin the French Community due to its deteriorating economy. A bloodless coup in 1978 saw a group of young officers set up a 14-member Military Committee for National Liberation (CLMN). This committee tried to improve the economic situation in the country but faced internal political struggles; these struggles have continued over the years and are one of the main issues which Mali faces as a country and has led to a number of insurgencies taking place.

Rise and Fall of Enron Research Paper Example | Topics and Well Written Essays - 1500 words

Rise and Fall of Enron - Research Paper Example Enron was an energy company that had the marketing of electricity and natural gas as its main activities.  Its’ revenues in 2000 were (supposedly) of $ 100 billion and the market value of the company exceeded $ 60 billion, which meant 70 times earnings and six times book value (Thomas, pp.41).  The company benefited from the deregulation of the energy market, facilitated by the company's own lobby in donations to political campaigns, but without the use of accounting gimmicks and management practices suspicions never had reached this level. Enron collapsed taking along with itself pension funds of its employees and other investors in the same category, a shortfall of at least $ 1.5 billion and dragging a debt of more than $ 13 billion.  For years, the company's directors maligned balance sheets, wiped the losses and inflated profits.  The magic book worked until the end of 2001.  Enron is the product of stunning deregulation of the energy sector.  It was a success and everyone wanted to invest in its actions as it was an excellent company with a higher rate of return, their investment valued up every month, even in times of crisis. The stock prices fell from a record high of $90 in 2000 to $0.60 at the end of 2001, after the scandal was revealed (Bratton, pp.1275). Trade operations of the company were based on complex financial transactions, most referring to businesses that would occur several years later, a practice that inflated their profits.  Operators placed the value of the company's shares way high, suggesting that before these future actions would even appreciate, without having to justify the markdown price, was the mark-to-market. Mark-to-market means considering a company’s assets so highly valued that it is possible to liquidate them at any time by the current market price.  The actions came to be worth about $ 85, behind the scenes; however, the company could only lose on failed projects internet and plants that never operated in India (Thomas, pp.50).   There is evidence that senior company executives were also involved in the fraud, as well as major banks.   The Securities and Exchange Commission initiated an investigation.  Enron was forced to redo their balance sheets for the last five years and admit that its profit in the period was $ 600 million lower than originally reported (Thomas, pp.44).   Auditors Fabricating the Facts The company’s auditor was Arthur Andersen, one of the key executives of the company, which contributed to concealing the scam, while, manipulating the revenue recognition principles.  Since being involved with the collapse of Enron, Andersen lost many prestigious clients. The company's employees took damage by losing their jobs; their savings in most cases were invested in Enron stock (Thomas, pp.46).  The tragic end of Enron shook the confidence of the American financial system.  According to the lawsuit filed by former shareholders, Enron hid th e injury and decreasing profits with the connivance of accounting firm, Arthur Andersen auditor (Healy & Palepu, pp.12).  Former Enron auditor approved fraudulent accounting practices and illegal schemes adopted to hide losses and then destroyed the evidence of the crime.   Involvement of White House   Enron was regarded as an innovator, admired (elected between 1996 and 2001 as one of the most admired companies according to  Fortune  magazine) and dynamic, and Kenneth Lay was a celebrity worlds of business (something that is not seen much in the post

ESSAY PORTION OF THE FINAL EXAMINATION Example | Topics and Well Written Essays - 750 words

PORTION OF THE FINAL EXAMINATION - Essay Example In this case, it is very obvious that Clooney had neither informed Pittson of her intention to post his grades to fulosers.com, nor obtained Pittson’s consent on the same. In this same vein, Pittson’s grievances meet the threshold for a full fledged legal case because FERPA applies to educational institutions and agencies that are funded under programs that are run by the US Department of Education and as such, are publicly owned. It is clear that Fargo University as the institution in which the plaintiff learns and the defendant lectures is a state-owned university. The binding of state-owned learning institutions under the Family Educational Rights and Privacy Act is well enshrined by the US Constitution in the Administrative Procedure Act (APA), Public Law 79-404, Stat. 237 of June 11th, 1946. The APA Act governs the manner in which administrative agencies of the US federal government should establish, propose and observe regulations. It is therefore important that w hen Professor Clooney was posting students’ and Pittson’s grades online, she did so, knowing that she is a member of a public institution, and thereby bound by the FERPA Act and all other acts that govern the running of state-owned institutions, courtesy of the APA Act. Conversely, even the defendant’s claim of ignorance to this fact may not stand in the court of law, since ignorance is no defense in the court of law. That the threshold for this case is widely met is a matter that is underscored by FERPA including the divulging of information on a student’s behavior, status and even school work. FERPA stipulates that before posting a student’s behavior, status, school work or grades, permission must be obtained from an eligible student or the student’s parents, in order to release such information from any student’s education records. By eligibility, it is meant that the student must have been the subject or person of the information being posted; be of a sound mind; and have attained the legal age. In the event that the student does not meet this threshold, contacting that student’s parents for permission becomes inevitable. It is clear that Cooper did not follow these steps but arbitrarily posted Pittson’s grades to a public forum (Mayers, Mawer and Price, 23). It is also important to note that FERPA clearly accords students above the age of 18 and 18 year old students, and students who have enrolled in any post-secondary learning institution, the right to privacy as touching grades, billing information and enrollment. The only exception to this provision is when the school or its officer(s) obtains permission from the student to share this kind of specific information with the parents. This also clearly underscores the sustainability of the case before the court of law, given that Professor Clooney sought not, informed consent from Pittson, despite Pittson having attained 18 years and being a po st-secondary student, particularly, a university. FERPA also adjures faculty members to maintain confidentiality of students’ educational records, as the custodian of students’ academic database. It is for this reason that FERPA specifies that faculty members and the personnel of learning institutions must not post, display or publish lists of students’ grades, in personally identifiable forms, either in electronic form, or in hard copy. This provision goes ahead to state

Ex-Offenders Transitioning Back into Society Research Paper

Ex-Offenders Transitioning Back into Society - Research Paper Example This essay asks that is once a criminal always be a criminal? Are there no chances left for a criminal to reform and lead a normal life? These are the questions faced by the society today. America has only 5 percent of the global population and yet 25 percent of the world’s prison population. America has 2.3 million prisoners behind bars and 5.1 million people on parole. A teaming population of 9 million ex-prisoners are reentering the American society every year. These people have already â€Å"paid their debt to the society† for committing crime and now it is society’s turn to provide them a chance to earn for their livelihood, lead normal life and become good citizens. This paper makes a conclusion that ex-prisoners form a sizeable population of workforce and their inclusion in the job market will give a fillip to the nation’s economy which is under strain. If the opportunities for employment and the other supports are denied to them, nearly half the number of ex-prisoners may return to prisons which will cost heavily on tax payers money and national exchequer. The staggering cost of maintaining prisons and prisoners have already touched $49 billion and if this allowed to increase it will add another $25 billion by the end of 2011.The nation cannot afford to spend $65000 per prisoner which can rather be spent on welfare measures of ex-prisoners and on creating employment opportunities for them thereby reducing recidivism.

VolunTourism Essay Example | Topics and Well Written Essays - 2000 words - 1

VolunTourism - Essay Example In order to make a VolunTourism trip, the first and primary requirement is accommodation. For this, my personal minimum requirements would be running water, a place to rest, requisite apparels, electricity and other important tools such as cell phone and electronic equipment. How Much Time/Percentage Of My Trip Do I Want To Dedicate To Volunteering And How Much To Travel & Tourism? In VolunTourism, I desire to dedicate most of the time for travel and tourism activities i.e. 65% of the total tourism time and the remaining i.e. 35% of the time on volunteering. How Sensitive Am I To Deprivation, Poverty, Starvation, Health Issues, Etc.? I am moderately sensitive with respect to certain health aspects such as deprivation or starvation. To a certain extent, I can deal with the issues of hunger or bad food. What Tolerance Do I Have For Extremes In Climate? I possess high tolerance with respect to freezing cold weather or humidity climate. However, I cannot tolerate extreme heat such as in dessert or near volcano among others. What Food Preferences And Aversions Do I Have? Concerning vegetable items, I do not possess any aversions. However, with respect to non-veg items, I have certain preferences and cannot eat every type of non-veg food. How Good Are My People Skills In Relation To Travel? I bear good interpersonal skills that might help me while travelling. I can speak with anyone at any place irrespective of any racial difference. However, at times, language barrier hinder my communication process. Moreover, I feel quite uncomfortable to travel alone. What Volunteer Experience Do I Have? I have several volunteering experience. To cite some few, I have volunteered activities such as charity works and assisting in performing medical responsibilities among others. What Voluntary Service Would I Like To Perform? I would prefer to perform charity activities such as providing medical assistance to those who are in

Choose a business whose main focus is in the manufacture of renewable Essay

Choose a business whose main focus is in the manufacture of renewable energy technology - Essay Example Aelos Wind Turbine Company may undertake strategic decisions such as defining the objective and policies of the company. Executives of the company are relegated with the task of analysing new markets and consequently designing new marketing strategies (Panneersalvam, 2006, p.2). They acknowledged the increasing demand in the wind energy industry; thus, they decided to offer their products to different countries. In addition, they have created alternative approaches to manufacturing. These executives established a long-term strategy that ensures sufficient financing. They focused on improving the technical features of the product. Lastly, executives at Aelos Wind Turbine Company designed strategies for recruitment, training, benefits, and salary. These are considered as strategic decisions as it determines the purpose, goal, and direction of the business organization (Panneersalvam, 2006, p.2). Meanwhile, tactical decisions are performed at the middle management level. Tactical decisions of Aelos Wind Turbine Company may include determining a suitable plant location, new product establishment, monitoring of budget, and acquisition of resources. Executives compare the overall performance of the company to the standard marketing plan. They analyzed summary reports that compare standard performance or overall plan for productions (Panneersalvam, 2006, p.2). In addition, they are concerned with information on actual versus the budgeted cost of error rates and processing accounting data. Lastly, these executives concentrate in variance analysis of firing and hiring, cost of training, and cost of recruitment (Panneersalvam, 2006, p.2). These decisions can be considered as tactical as those only affect a single department in the company. These decisions are frequently made by middle managers, which include heads of the departments (Panneersalam, 2006, p.2). Lastly, operational decisions are undertaken on the bottom management level. The operational decisions