A comparison of the Intangible Asset Related Standards, IAS38, IVS210 and ISA620 Using Similarity Analysis

Apstrakt

This article attempts to describe the standards dealing with intangible asset treatment by multiple regulatory bodies and subsequently compare them using content and similarity analysis. The specific standards debated are IAS 38 from an accounting perspective, IVS 210 from a valuation perspective and ISA 620 from an auditing perspective. The core standard is IAS38 because the basic aspect is the treatment of internally generated intangible assets, namely hard science patents and software. These types of assets are the product of intensive R&D and considerable intellectual effort with high inherent risk. The similarity analysis is conducted using 2 tools, Voyant tools, which is used to conduct a portable document format text similarity analysis of the standards’ text bodies taking into account the 53 most frequent terms excluding stop words. The technique used is principal component analysis to calculate points representing each standard text on double axis scatter plot. Based on that analysis the most remote standard is ISA 620 which is excluded from the second phase of statistical analysis using SPSS version 25. IAS 38 and IVS 210 are separated into two themes: definition clarity and detail intensity, the former theme containing nominal binary variables and the latter scale variables. These variables are introduced in SPSS version 25 and various similarity and dissimilarity measures are calculated such as simple matching, Jaccard and Euclidean coefficient indicating that the similarity of the two standards is rather average in relative terms.