Should The Public Heritage Collections Be Done - 997 Words

Accounting can be done in several different ways and the way it is done may result in consequences for organizational behavior and management. (O Hare, n.d.) One issue is the failure of museum to capitalize their collections and report them as assets. According to the Australian Accounting Standards, annual general-purpose financial reports will be misrepresented if heritage and collections are included as assets. One of the criteria’s of an asset is to bring future economic benefit. The question raised in relation to museum is whether the public heritage collections have any future economic benefits deriving from the collections which is economic to the museum? These arguments are very extensive and many museums can argue about the fact†¦show more content†¦Firstly, the asset must provide future economic benefit. Secondly, the reporting entity must control the future economic benefits in such a way that it can enjoy the benefit and prevent others to benefit from it. Finally, the transaction or event giving rise to the control must have occurred. (Aasb.gov.au, n.d.) However, an asset is only recognized as per AASB 116 in financial statement if it is probable that the future benefits from the asset will eventuate and if the item has a cost or value that can be measured. (Leo, Hoggett Sweeting, 2012) The term probable is means the like for the future benefit is higher than less likely to happen. An element will be considered as an asset only if it satisfy the probability of providing future benefits. (Aasb.gov.au, n.d.) An item will usually have a cost or value to use to measure reliably. The measurement of asset is made at its cost and appropriate measurement basis will be based upon model of accounting being applied. (Aasb.gov.au, n.d.) Items that so not have a cost or cannot be measured reliably cannot be considered as an asset. (Aasb.gov.au, n.d.) Museum and art collections include items such as work of arts, books, manuscripts, artefacts and collectables which are held for their cultural or historical significance. These items are either acquired at no or nominal cost. Therefore, they are measured at fair value. (Anao.gov.au, 2015) In some cases where we cannot define the fair value of these items, they cannot