IAS 38 contains some elements that seem to be reactions to opportunistic behaviour by preparers of accounts and to the degree of uncertainty surrounding goodwill as an unidentifiable intangible asset.These elements include:

Question

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IAS 38 prohibits the recording of internally generated goodwill and specifies impairment testing as a response to opportunistic behavior by preparers of accounts and the uncertainty surrounding goodwill as an unidentifiable intangible asset. The requirement to use a specific rate of amortisation is not mentioned as a response to such behavior and uncertainty.

IAS 38 Contains Some Elements That Seem to Be Reactions