Intangible Assets

Topics: Toll road, Balance sheet, SunPass Pages: 3 (1070 words) Published: May 29, 2013
a) Future tolling rights can be perceived as an investment made by a particular company in order to control the rights of that tool booth for an extended period of time. For instance, Queensland Investment Corporation are seeking tolling rights for up to 50 years following the completion of Brisbane’s 3rd tunnel, the ‘airport link’ tunnel (Fraser, A, 2013). Queensland Investment Corporation is completely owned by the Queensland government and is currently in negotiation with the Brisbane city council over the tolling rights. The QIC will pay a flat fee to the council in exchange for the protection of the toll booths and the QIC will make a return on their investment by making motorists pay to use the ‘airport link’ tunnel. The legal arrangement in this instance involves negotiations between the Queensland Investment Corporation and the Brisbane city council.

b) Future tolling rights are classified as an asset under the AASB 138 framework because it fits all the criteria of an asset and more suitably, an intangible asset. The definition of an asset is described as a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow toward the entity (Shying, M and Subramanian, R, 2012). This definition therefore classifies future tolling rights as an asset because Queensland Investment Corporation controls the resource as a result of negotiations with the Brisbane city council for the rights to control the tolls. Additionally, QIC receives future economic benefits as a result of motorists paying to use the ‘airport link’ tunnel. Furthermore, the ‘future tolling rights’ also fit the criteria of an intangible asset as the definition of an intangible asset is an identifiable non-monetary asset without physical substance (Shying, M and Subramanian, R, 2012) which describes a ‘tolling right’ as it is not physical in nature.

c) An asset is impaired when the carrying amount is greater than the...
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