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

Tile page

Approval page …………………………………………………………………...i

Dedication …………………………………………………….………………...ii

Acknowledgment…………………………………………………….…………iii

Abstract………………………………………………….……………………...iv

Table of content …………………………………………………………...……v

CHAAPTER ONE

1.0 Introduction ………………………………………………………………1

1.1 Background of the study…………………………………………….……1

1.2 Statement of the problem…………………………………………...…….4

1.3 Objective of the study…………………………………………………....6

1.4 Significant of the study………………………………………………...…6

1.5 Research questions……………………………………………………..…6

1.6 Research Hypothesis……………………………………………………...7

1.7 Scope / Delimitation of the study……………………………..…………8

1.8 Definition of terms ………………………………………………….……8

CHAPTER TWO

2.0 Literature Review……………………………………………….………10

2.1 Theoretical framework of the study……………………..………………10

2.2 Current literature review………………………………………….……16

2.3 Models and theories relevant to the Research question ………...………21

2.4 Summary of the literature ………………………………………………21

CHAPTER THREE

3.0 Research Methodology………………………………………….………24

3.1 Design of the study……………………………………..……….………24

3.2 Area of the study………………………………………………...………24

3.3 Population of the study………………………………………….………24

3.4 Sample and sampling techniques ……………………….………………25

3.5 Instrument for data collection …………………………………..………25

3.6 Validity of the instrument …………………………….…………….…25

3.7 Distribution and Retrieval of the instrument ……………...……………26

3.8 Instrument for Data Analysis ……………………...……………………26

CHAPTER FOUR

4.0 Data presentation and Analysis…………………………………………28

4.1 Data presentation and interpretations ………………..…………………28

4.2 Finding …………………………………………………………….……35

CHAPTER FIVE

5.1 Summary of findings, conclusion, Limitation and Recommendation ….40

5.2 Conclusion ………………………...……………………………………41

5.3 Recommendation ………………………...………………………..……41

5.4 Limitation for the study ………………………...………………………42

5.5 Suggestion for further studies ………………………....………………..43

References ………………………...……………………………...……..44

Appendix A………………………...…………………………...………45

Appendix B………………………...………………………………..…46

Questionnaire ………………………...…………………………………47

CHAPTER ONE

1.0 INTROUDCTION

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 50^th 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.