Intangible Assets (As-26) The intangible assets can be classified into three categories for accounting purpose.

Unidentifiable Acquired identifiable Internally generated identifiable 26.2-1 Unidentifiable Intangible Assets- Unidentifiable Intangible Assets mean assets which cannot be identified separately from other assets like- internally generated goodwill or other assets typically included in goodwill since they cannot be separated from goodwill. 26.2-2 Acquired identifiable intangible assets - Acquired identifiable intangible assets such as patents, licenses and trademark purchased goodwill generally meet asset recognition criteria, since they are acquired. And cost is paid for them presumable because they have future earning potential. When patents, licenses and trademarks are internally generated, it is generally possible to identify and capitalize directly related outlays, such as legal fee and registration cost. However, these expenditures are generally a very small fraction of the true worth of the assets. 26.2-3 Internally generated identifiable- intangible assets - Internally generated identifiable intangible assets such as brand which are controversial from an accounting standpoint - for example, valuable brands such as Coca Cola, Sony were created over years and it is difficult to arrive at the cost of generating these assets, internally it is possible that the worth of these brands may be worth billions of rupees and in some cases more than the tangible assets of these companies. Considering the above problems and controversies in accounting regarding intangible assets, the Institute of Chartered Accountants of India has issued AS-26 on intangible assets. This standard prescribes the accounting treatment for intangible assets. Objective of Accounting Standard 26.3 Following are the objectives of this standard: Prescribing accounting treatment for intangible assets Prescribing criteria for recognition of assets in books of account How to measure the amount at which the intangible assets should be recorded in Books Amortization method for intangible assets Disclosure about intangible assets in financial statements of the enterprises Disclosure The financial statement should disclose the following in respect of intangible asset:- Useful life or amortization rate. - Amortization method. - Gross Carrying amount, accumulated amortization and impairment loss at the beginning and at the end of the method. - Reconciliation of carrying amount at the beginning and at the end of the period. Further Disclosure: - If amortization period is more than ten years, the reason why the useful life is estimated for more than 10 years. - Carrying amount of intangibles whose life is restricted pledged on security. - Research and Development Expenses recognized as expenses during the period. Financial Reporting Of Interest In Joint Venture (As-27) What is Joint Venture? 27.1 Joint venture is defined as a contractual arrangement whereby two or more parties carry an economic activity under joint control. Control is the power to govern the financial and operating policies of an economic activity so at to obtain benefit from it. Joint control is the contractually agreed sharing of control over economic activity.

It must be noted that AS-27 only mentions the "Control" not the 'Influence' as compared to investment in associated in consolidated financial statement AS-23 and related party disclosure AS-18. For the joint venture the joint control must be demonstrated, not the significant influence in economic entity. As per the accounting standard the Joint Venturer may be of three forms: Jointly controlled operation Jointly controlled assets Jointly controlled entities Disclosure 27.4 A venture should make the following disclosure in its separate as well as in consolidated financial statement: A list of all joint venturer description of interest in significant Joint Venture Proportion of interest in case of jointly controlled entity. The aggregate amounts of each of the assets, liabilities, income and expenses related to its interest in the jointly controlled entities. Amount of capital commitments in the joint venture that has been incurred with other venturer and its share in such capital commitments Any contingency that has been incurred in relation to its interest in joint venture. Its share of contingencies that has been incurred jointly as the other venturer Contingencies for which the venturer is liable for other venturer of joint venturer Most often, divergent views are found between the preparers (corporate managements)