Hong Kong regulatory authorities await final approval of a draft international accounting standard that can force the territory's companies to write off intangible assets over 20 years. The draft standard would cost corporates billions of dollars in amortisation costs if implemented, sources said. Potentially, it would mean mastheads, such as food and beverage brands, and newspaper titles, would not be recognised in accounts. James Fawls, director of professional standards at the Hong Kong Society of Accountants, said regulators were awaiting the International Accounting Standards Committee's (IASC) final policy stance on intangibles. 'It is something we are watching quite carefully.' However, standard-setters did not want to be seen to be 'galloping ahead' of their international counterparts, he said. Regulators had been adopting a growing number of IASC standards in recent years. The IASC had made it clear it was looking to rapidly move to final implementation of the standard. The intangibles issue had prompted a storm of controversy. British authorities had defied the general international trend towards forced amortisation of intangibles, supported by corporates, which argued such assets should not be written down unless their value actually diminishes. The British proposals suggested there be no compulsion for companies to write off goodwill and intangibles. Instead, it was proposed that companies be required to fully account for the value of individual units - a value that would include actual capital equipment, goodwill and intangibles - at net present value. If the present value of the total business unit fell below the value of the net assets, companies would be forced to start with intangibles in marking down the value of income streams. But on the intangibles issue, Britain is very much in the minority, with most other major accounting powers moving towards amortisation over a set period, generally 20 years. Hong Kong authorities are keeping a close eye on international developments on the goodwill front. The IASC was understood to be re-evaluating this area, in a move which could have a major effect on Hong Kong-based companies. Firms in Hong Kong have a choice on how to treat goodwill on businesses they acquire, with the option of either writing it off against reserves on day one or amortising it over its useful economic life. This is a more lenient policy than that adopted in other countries including Australia, where goodwill must strictly undergo amortisation over a 20-year period, despite an outcry from major industrial companies. This type of policy in Hong Kong will impact on the profits of highly acquisitive companies, such as real estate firms. Mr Fawls said the board was awaiting IASC deliberations on the goodwill issue before deciding on its future policy.