Reading B          The treatment of intangible assets in the field of accounting has been steadily gaining attention.By applying a resource-based view of the firm, intangible resources can be seen as the fundamentaldrivers of a firm’s sustained profitability. Evidence suggests that firm intangibility is positivelyrelated to the persistence of firm-specific profits. However, there is a current lack of guidance andregulation for the disclosure and reporting of financial data concerning investments in intangibles. Inaddition, there is a general lack of international harmonization of such standards.          This problem can be approached from the perspective of innovation, which suggests that theeconomic properties of intangible assets are not reflected in current accounting principles. There iscertainly a great deal of room for improvement in current standards, but some general guidelineshave been developed.           We must first begin by defining intangible assets. Intangible assets are largely defined by a lackof physical substance. For example, accounts receivable and financial investments lack such aphysical substance but are nevertheless classified as tangible assets on the balance sheet. This is whyit is required that intangible assets be “non-monetary.” This assures that the asset itself is not afinancial instrument or cash equivalent.           The International Accounting Standards clearly define three fundamental requirements forintangible assets that must be considered for accounting purposes. First, the asset must beidentifiable. The intangible asset must be distinct from other assets, meaning that it could,theoretically, be separately identified and sold or transferred to another firm.          Secondly, the asset must be controllable, meaning that legal rights of ownership are clear anddefensible. Additionally, the firm must be able to exert some degree of control over the intangibleasset, in order for it to be considered an asset. The controllability requirement ensures that directmanipulation of the asset is possible, and that the asset is not merely at the whim of externalvariability or instability.             The third fundamental requirement is that future economic benefits exist, if the intangibleasset’s benefits are related to either revenue or cost savings. As with physical assets, such asmanufacturing equipment, the ability of the asset to generate income is a fundamental accountingrequirement. Assets, by definition, must have either a commercial or exchange value.
【題組】16. According to the article, which of the following would be classified as an intangible asset?
(A) Inventory
(B) A trademark
(C) A stock certificate
(D) Equipment