Nick Tabakoff (1999) stated: News Corporation is far from convinced of the merit

Question

Nick Tabakoff (1999) stated: News Corporation is far from convinced of the merits of the standard [IAS 38]. At the Australian division, News Limited, finance director and deputy chief executive Peter McCourt says: The reason you get standards like that is that they are prepared by people who are not really responsible to anybody. The business community gains nothing from writing off the value of intangibles over a limited time frame. If the standard comes in, the market will simply add back the amortisation. McCourt believes the standard penalises companies that are acquisitive when it comes to intangible assets. He can see no reason for the existence of the standard. 'Who is it aimed at, who is being better informed by taking that charge? I don't think it gets you anywhere.

Explanation / Answer

1) Ammortisation of intangibles is rubbish as it distorts true cash flows and thus economic reality. Resolved

2) It penalises companies that are acquisitive when it comes to intanglible assets. Resolved

3) There is no gain by business community by writing off the values of the intangibles over limited time frame. Resolved

4) Minimising the values placed on intangibles. Resolved

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