Intangible Assets

Intangible Assets

1. FRS 38

2. ASSETS

   • Tangible Assets
     • Have Physical Substance
     • FRS 16
   • Resource controlled by an enterprise that bring FEB

3. Represent the rights & privileges that ownership brings

4. Identifiable Non-Monetary Asset w no physical substance

5. Recognition Citeria

   • 3 Key Element
     • Identifiable
       • Separable from entity to be sold, transferred etc.
       • Arise from contractual or legal rights
         • Eg. Patent, Copyright
     • Control
       • Has power to obtain FEB
       • Restrict access by others
     • FEB
       • Rev from sale, cost saving, benefits
   • Probable that FEB will flow to enterprise
     • Using reasonable & supportable assumptions
   • Cost can be measured reliably
     • In monetary terms

6. Internally Generated IA

   • Research
     • Expense Off
     • Original & Planned Investigation
     • Eg. Obtain NEW knowledge (Reserach)
       • search for application of findings & alternatives
       • formulation & design of possible alternatives for new or improves materials and others
   • Development
     • Application of research findings or other knowledge
     • Prior to commencement of commercial production
     • Eg. Pre- production Models
       • Design new tools
       • Design, construct, operate not on a scale feasible for commercial production
       • testing of chosen alteratives
     • Expense Off
       • CAPITALIZED if meet 6 criterias
         • Feasible to complete so can be sold
           • Intend to complete it
           • Able to Use or Sell it
         • Generate FEB
         • Enough Resources to complete
         • Able to measure reliably the expediture

7. Recognition Expense

   • Expense Off
     • Research
     • Start-Up
     • Training
     • Advertising & Promotion
     • Relocation/Reorganisation

8. Measurement

   • Initially at cost
     • Expenditure on IA initially recognised as IA shall not be capitalized afterwards
   • Subsequent
     • Revaluation
       • increase in value 10K, increase OCI (reserve)
         • Subsequent Decrease of 20k
           • Expense of 10k , reduce reserve 10k
       • decrease in value, expense off
     • Cost Method

9. Impairment Loss

   • Carrying Amount > Recoverable Amount
     • Recoverable Amount
       • Higher of FV less cost to sell & Value in Use

10. Intangible Assets Vs Goodwill

11. Amortisation / Imapirment

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