Why would people disagree with a proposed accounting standard?

Answer 1

Despite of having AASB 138 and compliance of IAS 38, there is so many back draws and there is a necessity for a standard for intangible assets. Specially, when talking about softwares, there is a big point to think about and realize that this standard can't be sufficient for accounting of softwares which are not integral to the operation of related hardware. There is a problem in accounting for internally generated brands which might have a useful life and a value yet it cannot be accounted. "Wallman (1996) provides several reasons to account for this distortion. The rapid acceleration of events that may significantly affect share values makes the system of annual and quarterly reports obsolete. It is hard to obtain a satisfactory picture of anything that is moving so quickly and changing so often when only snapshots are taken at relatively long intervals. Traditional financial statements are now significantly less reflective of the assets that create wealth than in times past. It has also become a formidable task to define the outer edges of companies. Historically, the resources that produced the wealth were 'hard' or tangible and were recognised in the financial statement as assets or costs. However, the shift to a knowledge-based economy has created, or focused, increased attention on entirely different categories of resources. Intangible resources, such as brand names, intellectual capital, patents, copyrights, expenditures for research and development and human resources, are generating an increasing amount of our overall wealth. Nonetheless, these 'soft' resources are only given minor recognition in today's financial statement." Wallman perfectly shows the value and need of recognition of such "soft" resources which are generally given a very minor recognition in today's financial statements.