Should All Intangible Assets Be Shown in the Balance Sheet Research Proposal

Should All Intangible Assets Be Shown in the Balance Sheet - Research Proposal Example Accounting, as a profession, also grew in importance as the complications regarding the nature of the business also grew simultaneously. The use of creative accounting by the firm have necessitated a large scale changes to take place within accounting literature to suggest more radical approaches to handling many â€Å" creative accounting† issues of importance. A major offshoot was that intangible assets grew in gross disproportion to tangible assets. Still, despite growing ‘suspect’ irregularities in accounting of intangible assets that emerged from time to time, the world did not place proper regulations in place; one of these missing regulations included presenting clear and proper information of all intangible assets in the balance sheet. In the backdrop of Enron disaster, UK and US has initiated many changed in different accounting practices such as amendments made in IAS 38 however, there is still lot to be done in terms of intangible asset disclosure in ac counting statements as some of the firms are still engaged in practices of evading the inclusion of intangible assets into their balance sheet.... Statement of the Problem Intangible assets are defined as assets with the quality of being identifiable as well as quantifiable apart from the goodwill. Thus most of the financial assets used by the firms, mostly with the intention of leveraging the business, are considered as intangible assets. However the use of intangible assets as one of the critical means of hiding some of the highest importance accounting information with the potential to affect the decision making of investors is on increase as companies, despite tightening regulations and accounting standards is using them to conceal different facts. This has become even more important in the wake of the biggest corporate scandals like Enron and World Com both of which tried to conceal important facts through the reporting of accounting information in more creative way. The use of intangible assets was one of the most important mean used by these firms to hid information. This also creates very interesting ethical questions of the accounting practices being used by the firms. This research will attempt to discuss whether, the scope of the disclosure of the tangible assets in balance sheet should be increased to include all the tangible assets to be reported on the financial statements Literature Review The concept of intangible assets, in itself, is a very important and somewhat different qualities associated to them. (Berry, 2004, 15). Intangible assets hold a very different and somewhat blurred distinction between what comprise of the intellectual capital of the firm i.e. in the form of its human resources, copyrights, patents etc however, on the other hand financial assets are also often