The bomb in the balance sheet
Article Abstract:
Members of the Auditing Standards Committee oppose the incorporation of intangible assets into published accounts due to: the fact that valuation figures are arbitrary; the fact that balance sheets are not summaries of corporate worth; and the fact that the inclusion of arbitrary figures is misleading and debases the value of the balance sheet. Computation of fair value of brand names is difficult but must be done in order to avoid the undervaluation of assets. To ascertain the return on assets by management, shareholders must know the totality of the asset base that is used. However, shareholders should be aware that companies incorporating intangible assets may inadvertently display an inadequate return on assets to company stockholders.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1989
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Off-balance sheet financing
Article Abstract:
UK corporations are making increased use of off-balance sheet financing. Some question has arisen in accounting circles as to whether the treatment of off-balance-sheet finance meets the 'true and fair' requirement of financial reporting standards. Technical Release (TR) 603 of the Institute of Chartered Accountants attempts to establish some guidelines for treating off-balance-sheet finance and to curb possible abuses. Proposals set forth in TR 603 are discussed.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1987
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Brands, goodwill, and the balance sheet
Article Abstract:
The discussion about whether companies should account for brand names has overshadowed the debate over accounting for other types of intangibles. Brands are important because they affect the price which takeover companies are willing to pay. Experts recognize that present accounting methods for intangible assets may not successfully reflect the economic conditions of a company's financial position and changes in accounting practices may be necessary.
Publication Name: Accountancy
Subject: Business
ISSN: 0001-4664
Year: 1989
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