Reference no: EM133123153

Question - Suppose the IASB acknowledges that costs for education of personnel add value to the organization and therefore can be capitalized and subsequently tested for impairment instead of expensed immediately.

This is allowed only if certain criteria are met, for example (i) if there is an agreement with the employee that the costs have to be paid back to the company when the employee leaves the company within 5 years and (ii) if it is likely that the training will yield economic benefits to the organization that exceed the costs.

a) Do you think such a change would be more likely driven by the information role of accounting or by the stewardship role of accounting?

b) Would profit/loss after this change reflect the economic concept of income better, worse or the same?