International Accounting Regulations Assignment

International Accounting Regulations - Assignment Example FRS 10 defines the classes of intangible assets that would be covered by the provisions. These intangible assets may include â€Å"licenses. Quotas, patents, copyrights etc and also other assets that are capable of being disposed of or settled separately without disposing of the entity.† (Neil D. Stein 1998)FRS 10 defines the classes of intangible assets that would be covered by the provisions. These intangible assets may include â€Å"licenses. Quotas, patents, copyrights etc and also other assets that are capable of being disposed of or settled separately without disposing of the entity.† (Neil D. Stein 1998)However, FRS 10 has left certain important issues in connection with the intangible assets vague that makes the provisions unserious about the objective it intends to accomplish.  Ã‚  Ã‚  FRS 10 has the following shortcomings which have made the treatment of goodwill and other intangible assets favorable to the firms:†¢ FRS 10 gives the firms the liberty to carry through the value of the goodwill or other intangible assets permanently at the purchased cost. This vitiates the chances of the true and fair valuation of the intangible assets as shown in the financial statements.†¢ Although there are provisions governing the impairment of the value of the intangible assets, the impairment process as detailed in the FRS 10 and FRS 11 are highly subjective and devoid of clarity. This allows the firms to postpone the impairment of the intangible assets as long as they want on the plea that the valuation and impairment procedure is costly and cumbersome.†¢ Moreover, the treatment of the negative value of the goodwill under FRS 10 does not follow normal accounting practices.†¢ The provisions of the Companies Act 1985 are not taken into account while allowing the goodwill to be carried for an indefinite period.