This chapter has presented the current rule relating to the reporting of intangible assets. This rule prohibits internally generated brands, mastheads, publishing titles, customer lists and items similar in substance from being recognised as intangible assets, yet these are valuable assets that can be separately identified and sold. Applying this rule results in inconsistent treatment when two entities operate in the same industry with similar intangibles, but have statements of financial position that are not comparable because the intangible assets recognised depend on whether they were ‘purchased’ or ‘internally generated’. 

Required

Assume you are either (a) the CEO of an entity that has a large proportion of intangible assets and you find the current accounting rules not logically sound, or (b) an International Standard Setting Board member defending the current status of regulation regarding intangibles. Write a short report to the Standard Setting Board, putting forward an argument in favour of your views. (You may wish to include a discussion of goodwill.)