3 written off immediately against earnings 29 appendix

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Unformatted text preview: lowing ways: (1) Amortized through the profit and loss account over 5 years. (2) Amortized through the profit and loss account over its useful economic life. (3) Written off immediately to reserves. Intangible fixed assets must be valued at their purchased price, which must be systematically reduced if they have limited useful economic lives. Research and development expenditure may be treated in the following ways: (1) Capitalized and written off through the profit and loss account over 5 years. (2) Capitalized and written off through the profit and loss account over its useful economic life. (3) Written off immediately against earnings. 29 APPENDIX 4: LEGAL AND INSTITUTIONAL BASIS OF ACCOUNTING REGULATION33 Australia As a former British colony and continuing member of the Commonwealth, ties with the United Kingdom are still significant and have resulted in the adoption of UK company law and accounting practices. Since World War II increasing trade contacts with the US have seen the introduction of American accounting principles as well as a number of locally developed standards. Distinguishing features of the Australian system are: • The federal nature with the States only recently ceding their powers over companies to the federal governme...
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