Tangible assets are straight forward enough to understand, these are assets that can be touched, can be seen, assets that have physical substance. Motors vehicles used in a car rental business, …show more content…
It cannot however be argued the importance of human capital to the performance of a company. (Khan & Khan, 2010; Livine, 2014; Bengtsson & Wallstrom, 2014) Human capital results in the formulation of that next big thing, spotting the gap in the market which allows the soar to new heights. This form of capital could the director who drives the company or the worker who mans the textile cutting machine. Depending on the company the human capital will vary. Unlike the other forms of capital that may only relate to specific industries, human capital will be present in all types of businesses. And this is evident in the football …show more content…
These are not tangible and therefore another standard may be applied for these incorporeal assets, IAS 38 Intangible assets (IASB, 2014). The standard’s objective is prescribing an accounting treatment for intangible assets. This entails criteria for recognition as well as how to measure the carrying amount of intangible assets. Lastly this standard requires certain disclosure for any recognised intangible assets (IASB, 2014). IAS 38 defines intangible assets as identifiable non-monetary assets with no physical substance. An asset is identifiable if it separable, meaning it can be sold, transferred, rented or exchange. An asset is also identifiable if it arises from legal or contractual rights (IASB, 2014). The entity must be able to control the intangible asset (usually evident by legal right). IAS 38 raises the difficulty of proving control over employees, but identifies that the skills, knowledge and experience of an employee can result in future economic benefits for an entity. Future economic benefits that can be generated by intangible assets can be revenue or any cost