Accounting For Intangible Asset, The Way Out (A Case Study Of Guinness Nigeria Plc Sapele Branch Delta State)

Project and Seminar Material for Accountancy / Accounting

Accounting For Intangible Asset, The Way Out (A Case Study Of Guinness Nigeria Plc Sapele Branch Delta State)


Abstract


This project is a comprehensive study and examines the “Accounting treatment of intangible assets the way out, (A case study of Guinness Nigeria Plc Sapele branch Delta state. This project is aimed at determining the impact of the current accounting range of thinking relative to intangible assets and how such resources should be valued, recognized and presented in the financial Reporting of companies. Data were collected through primary and secondary sources. The finding revealed that the impact of goodwill as intangible assets plays vital role on the organization adequate skilled personnel in measuring and evaluating accounting for intangible assets. Therefore, the impact of accounting for intangible assets cannot be over emphasized hence it depends on the conferment of a given organizational setting. Form the conclusion of the study: it can be observed that there will be serious potentials for misunderstanding and suspicious resulting from information based on mix of conflicting accounting policies. It is therefore recommended that policy maker should promote education business training initiative with a view to building broad capacities in intangible management.


Table of Contents


Preliminary Page(s)

  • Title page
  • Approval page
  • Dedication
  • Acknowledgment
  • Abstract
  • Table of content

Chapter One

1.0 Introduction

  • 1.1 Background of the study
  • 1.2 Statement of the problem
  • 1.3 Objective of the study
  • 1.4 Significant of the study
  • 1.5 Research questions
  • 1.6 Research Hypothesis
  • 1.7 Scope / Delimitation of the study
  • 1.8 Definition of terms

Chapter Two

2.0 Literature Review

  • 2.1 Theoretical framework of the study
  • 2.2 Current literature review
  • 2.3 Models and theories relevant to the Research question
  • 2.4 Summary of the literature

Chapter Three

3.0 Research Methodology

  • 3.1 Design of the study
  • 3.2 Area of the study
  • 3.3 Population of the study
  • 3.4 Sample and sampling techniques
  • 3.5 Instrument for data collection
  • 3.6 Validity of the instrument
  • 3.7 Distribution and Retrieval of the instrument
  • 3.8 Instrument for Data Analysis

Chapter Four

4.0 Data Presentation and Analysis

  • 4.1 Data presentation and interpretations
  • 4.2 Finding

Chapter Five

5.0 Summary of Findings, Conclusion, Limitation and Recommendation

  • 5.1 Summary of Findings
  • 5.2 Conclusion
  • 5.3 Recommendation
  • 5.4 Limitation for the study
  • 5.5 Suggestion for further studies
  • References
  • Appendix A
  • Appendix B
  • Questionnaire

Chapter One


1.0 Introduction

1.1 Background of the Study

Accounting for intangible asset has gained prominence in the past few decades due to changes in the way the business world operates. Intangible assets are either acquired in a business combination on developed internally. In case of acquisition in a business combination such assets are recorded at their air value, while in case of internally generated intangible assets the assets are recognized at the cost incurred in development phrase. In relation to the development of internally generated intangible assets there are two phrases research phases and development phase. Research phase includes all activities and cost incurred before the intangible assets is commercially feasible, while the development phase include all activities and costs incurred after the asset is established to be commercially feasible. All costs in research phase are expensed in the period incurred while costs incurred in development phase are capitalized. Intangible assets are typically expensed according to their respective life expectancy. Intangible assets have either an identifiable or indefinite useful life. Intangible assets with identifiable useful lives are amortized on a straight line basis over their economic or legal life, which ever is shorter. Examples of intangible assets with identifiable useful like include copyrights and patents intangible assets with indefinite useful lives are reassessed each year for impairment. If an impairment has occurred, then a loss in determined by subtracting the assets fair value from the asset’s book / carrying value. Trademarks and goodwill are examples of intangible assets with indefinite useful lives. Goodwill has to be tested for impairment rather than amortized if impaired, goodwill is reduced and loss is recognized in income statement.

According to International Accounting standards Board Standard 38 (IAS 38) defines an intangible asset as: “an identifiable non-monetary asset without physical substance. This definition is in addition to the standard definition of an asset which requires a past event that has given rise to resource that the entity controls and from which future economic benefits an expected to flow. Thus, the extra requirement for an intangible asset under IAS 38 is identifiable. This criterion refines that an intangible asset is separable from the entity or that it arises from a contractual or right.

According to financial accounting standards Board (FASB) Accounting standard codification 350 (ASC 350) defines a intangible asset as an asset, other than financial asset that lacks physical substance. The lack f physical would therefore seen to be a define characteristic of an intangible asset. Both the (IASB) and (FASB) definition specifically preclude monetary assets in their definition of in intangible asset. This is necessary in or to avoid the classification of items such as accounts receivable, derivatives and cash in the bank as an intangible assets, including: computer, software, copyright and patents.

The international Accounting standards Board (IASB) of some guidance (IAS38) as to how intangible assets should be accounted for in financial statements. In legal intangibles that are developed internally are not recognized and legal intangibles that are purchased from third parties are recognized. Wordings are similar to under generally accepted accounting principles (GAAP), intangible asset after their initial recognition is not allowed. Intangible assets are carried as historical cost less accumulated amortization and impairment.

Intangible assets have been argued to be one possible contributor to the disparity between company value as per their accounting records, and company value as per their market capitalization considering this argument, it is important to understand what an intangible asset truly is in the eyes of an accountant. A number of attempts have been made to define intangible assets. Despite difficulty to carryout in practice the problem there are a number of performance measure of intangible assets presented in the literature also applying them in practice see example mouritse et al, (2003), ratuating et al (2004), currently, there is very little experience on how different organizations are using performance measurement to manage their intangible assets is systematically allocated to expenses allowed to exceed forty years. The process of allocating the cost of intangible assets to expenses is called amortization and companies almost always use the straight line method to amortize intangible assets.

Furthermore, this issues is so important to business organization in that if adequately maintained it bring about good relationship between the organization and the society. In view of this study which is narrowed down to guinness Nigeria Plc can approximately be describe as one of the most prominent and well known company in the country. The company celebrated its 50th year (Golden Jubilee) in the year 2002. Now it is obvious that it has been in existence since the past 53 years in Nigeria and the demand for it product, no doubt has continue to grow and its has indeed remained consistently high all through the years. The company majors in production of small and big Guinness stock, bear, harp, guilder, spark, malta guinness. It also produced satzenbian beer. This company has branches in various parts of the country since early seventies precisely 1974. It first production plant was established at Ikpoba scope of Benin city. This date the company has continued grow and it remains the most dominant and prominent companies in the Brewery industry.


1.2 Statement of the Problem

Management accountant have long recognized that for many product the proportion of indirect overhead costs has tended to increase firms, make greater use of intangible investments to produce their input and to manage their business strategies. Such observation driven by increased product, complexity and often arising from the adoption of mass customization strategies led to the development techniques such as activity based costing and the balance score card designed to produce more strategy relevant costing information and key performance indicators than recognized indicators than recognized the intangible value drivers of the business. The problems associated with the research which motivated the researchers to embark in the study are

  1. The generally accepted accounting principle recognized as financially relevant accurate event that arise from intangible asset.
  2. The GAAP account, process and present there intangible asset related events.

1.3 Objective of the Study

The objective of this work is intended to do the following:

  1. To explore the current range of thinking native to intangible assets.
  2. To determine how such intangible resources in values, recognized and presented in the financial reporting of companies.
  3. To determine whether accounting for intangible assets enhances accountability, transparency, and unproved quantity in reporting financial results of the companies
  4. To find out if accounting for intangible asset is cumbersome and create problems

1.4 Significance of the Study

The significance on the benefits of accounting for intangible asset are:

  1. It shows valuation, recognition and presentation of intangible asset.
  2. To enhance ac accountability and transparency in reporting
  3. It gives the user of the financial statement maximum satisfaction and reliability of the financial statement.

1.5 Research Question

These are question asked in order to create answer to the research problems. The questions are as follows:

  1. Should the generally accepted accounting principles (GAAP) be recognized as financially relevant and accurate event that arise from intangible assets?
  2. How should generally accepted accounting principles (GAAP) account process and present these intangible assets.
  3. Does accounting for intangible asset enhance accountability transparency and quality in reporting?
  4. Does the impact of goodwill as intangible asset provides steady growth and continuous profit when properly analyzed?
  5. Does the diversified accounting skill and experience of the accountant help in the account recognition and presentation of intangible assets?
  6. Does accounting for intangible asset in an organization increase customer’s patronage?
  7. Does an accountant follow the statutory requirement in the preparation of intangible asset account?
  8. In accounting, for intangible assets does it creat problem in the preparation.
  9. Should organizations have adequate skilled personnel in measuring and evaluating accounting for intangible asset?
  10. Does the employment of unqualified staff create problems in accounting for intangible asset?

1.6 Research Hypothesis

  1. Ho: The diversified accounting skills and experience of the accountant does not help in the account recognition and presentation of intangible asset.
    Hi: The diversified accounting skills and experience of the accountant help in the account recognition and presentation of intangible asset.
  2. Ho: The generally accepted accounting principles (GAAP) account, process and presentation of intangible asset does not enhance accountability and transparency in reporting.
    Hi: The generally accepted accounting principles (GAAP) account, process and presentation of intangible assets enhance accountability and transparency in reporting.
  3. Ho: The accountant should not follows the statutory requirement in the presentation of intangible asset.
    Hi: The accountant should apply the statutory requirement in the presentation of intangible asset.

1.7 Scope of the Study

The scope of the study of the researcher delimits its study to accounting for intangible assets, the way out (A study of guinness Nigeria Plc Sapele branch Delta State).


1.8 Definition of Term

The following are terms associated with the research work.

Intangible Asset (IA):

The dictionary defined intangible asset as an asset that is saleable though not material or physical

Intellectual capital (IC):

Is defined as an intangible asset that I not financial or physical and has been a formalized. Captured and leverages to produce a higher valued asset.

Goodwill:

Goodwill is arguable the most conforming intangible asset to (GAAP) it is the excess it four value over book in a purchase transaction.

Financial Statement:

According to dictionary of finance defines it as written record of the financial status of and individual association or business organization.

Financial Reporting:

It essentially involves preparing and issuing financial statement (J.C. Aroh 2010).


Chapter Five


5.0 Summary of Findings, Conclusion and Recommendation

5.1 Summary of Findings

Finding in the course of study accounting treatment for intangible asset after the research work of their searcher. It was found that

  1. Accounting for intangible asset enhances accountability, transparency and quality reporting.
  2. The diversified skill in accounting and experience of the accountants will help in the account, recognition and presentation of intangible asset.
  3. The impact of goodwill as intangible asset steady growth and continuous profit when properly analyzed.
  4. Accounting for intangible asset in your organization increase customers patronage.
  5. The accountant must follow statutory requirement in the preparation of intangible asset accounts.
  6. The employment of unqualified staff will create problems in accounting for goodwill as an intangible asset.
  7. The recommended method of appraisal in measuring and revaluating of intangible asset gives better environment accounting relationship with cost countries.
  8. Adequate skilled personal in measuring accounting for intangible asset in necessary.

5.2 Conclusion

Generally, with emergency of intangible asset and in general, intangible resource is inaudible. The accounting process should treat these types of financial event with it’s GAAP guideline and not attempt to preclude of from recognition plainly, accounting for intangible asset is not helpful to the external user. Such recognition will simple inflate the value of corporations and will cause companion to be more difficult and the financial statement viewed more it is believed that large amount of intangible asset in a balance sheet shown sign of financial weakness.


5.3 Recommendation

Consequent upon the finding stated here are the following recommendation

  1. In moving debate forward the primary focus must be on efforts by companies to report intangible asset in more consistent and comprehensive way whatever the theoretical benefit of changes to accountancy practice efforts to hind a practical way forward have not proved successful.
  2. Policy maker should promote education business training initiative with a view to building broad capacities in intangible management.
  3. Specific examination of the welfare impact should patent protection it has been under taken by Chaudhum et al (2008).

5.4 Limitation of the Study

The researcher was faced with numerous challenges that made the study almost impossible among the challenges are:

  1. Lack of co-operation from some respondent at the process of conducting the research questionnaire was given to fill, respondent to some were able to correctly and return while fill others were reluctant to till and return.
  2. Language Barrier: At the process of conducting this research work, questionnaire was given to respondents by hand and spoken words of which most of them do not understand English language which pose a challenge.
  3. Limited fund: Another challenges which there searcher face is fund, there was no enough fund for the researcher to carry out the research work at the appropriate time.
  4. Time Factor: Short period of time give to write and defend the project also pose a challenge.

5.5 Suggestion for Further Studies

  1. Since the researcher used chi-square method in analyzing the statistical table, other researcher should used other method such as t-test, or analysis of co-variance 2-test to see if it will arrival at the same result.
  2. I will also suggest that further research should be conducted on intangible asset to give more value to the organization.
  3. Since the researcher used random sampling technique other researcher should used judgement sampling technique in this research work ot select the sample form he population.

How To Get The Complete Material For Accounting For Intangible Asset, The Way Out (A Case Study Of Guinness Nigeria Plc Sapele Branch Delta State)


Project Material Download

3,000 Naira


The Complete Material will be Sent to You in Just 2 Steps

Quick & Simple…


Step One Purchase

Make a Mobile Transfer or POS Payment of ₦3,000 to any of the Account Below

Access Bank PlcAccount No.: 0811003731
Name: Samphina Academy
Account Type: Current
Zenith BankAccount No.: 1225513212
Name: Samphina Academy
Account Type: Current

Or CLICK HERE To Pay With Debit Card

FOR CLIENTS OUTSIDE NIGERIA
CLICK HERE To Pay With Debit Card ($15)
GHANA – Make Payment of 80 GHS to MTN MoMo, 0553978005, Douglas Osabutey 

Step Two Purchase

Send the Following Details on WhatsApp ( 08143831497) After Payment

  • Payment Details
  • Email Address 
  • Accounting For Intangible Asset, The Way Out (A Case Study Of Guinness Nigeria Plc Sapele Branch Delta State)

The Complete Material Will Be Sent To Your Email Address After Receiving Your Details
T & C Apply


  Contact Our Help Desk


⚠️ Need a different topic? Perform a quick search



Get A Complete Business Plan For Any Business In Nigeria

Business Plan for Businesses in Nigeria

  Business Plans in Nigeria


Disclaimer


This research material “Accounting For Intangible Asset, The Way Out (A Case Study Of Guinness Nigeria Plc Sapele Branch Delta State)” is for research purposes and should be used as a guide in developing your research project / seminar work. For no reason should you copy word for word (verbatim) as samphina.com.ng will not be liable for any who copied the material.

The aim of providing this material is to reduce the stress of moving from one school library to another all in the name of searching for research materials. This service is legal because, all institutions permit their students to read previous projects, books, articles or papers while developing their own works. According to Austin Kleon “All creative work builds on what came before”.

samphina.com.ng is only providing this material “Accounting For Intangible Asset, The Way Out (A Case Study Of Guinness Nigeria Plc Sapele Branch Delta State)” as a reference for your research. The paper should be used as a guide or framework for your own paper. The contents of this paper should be able to help you in generating new ideas and thoughts for your own research. Use it as a guidance purpose only.

Samphina Academy

Samphina Academy is an Online Educational Resource Center that is aimed at providing students with quality information and materials to aid them in succeeding in their academic pursuit.