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1741583
IAS 38 : INTANGIBLE ASSET
Description
Mind Map on IAS 38 : INTANGIBLE ASSET, created by wanfarishaamirah on 02/12/2014.
Mind Map by
wanfarishaamirah
, updated more than 1 year ago
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Created by
wanfarishaamirah
over 9 years ago
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Resource summary
IAS 38 : INTANGIBLE ASSET
DEFINITION
Identifiable
separable
↑ from : contractual / legal rights
Non-monetary
$ held
A to be received in DETERMINABLE amount
Asset
control & past event
Control acieved if entitiy has :
ability-restrict access
power- obtain f.e.b
from legal rights ie copyright
NOT NECESSARY but, more DIFFICULT to PROVE if dont have it
market & tech. knowledge
expected f.e.b
w/o physical substance
Judgement: which is more significant
Physical(tangible)
IAS 16:PPE
Non-physical (intangible)
IAS 38: IA
RECOGNITION
Probable f.e.b flow
assumed to be satisfied in both situation
Reliably measured
Cost measured @ FV
FV= Market expectation of expected f.e.b
IA separately identified
sufficient information
Reliably measured
MEASUREMENT
INITIALly measured @ COST
ACQUIRED
Part of biz comb.
FV @ acquisiton date (FV= market expectation of expected f.e.b)
MP in ACTIVE MARKET
Separately
SUBSEQUENT recognition
Rev. needs ACTIVE MARKET hence, X for:
-brands
mastheads
patents/trademarks
customers lists
publishing titles
CAPITALISED
purchased goodwill
purchased IA
DEVELOPMENT costs
EXPENSED
start up cost
training
advert
if paid, becomes asset : prepaid __
internally generated
goodwill
brand
customer list
training
mastheads and publishing titles
SUBSEQUENT EXP.
due to nature of IA, usually cant be distinguished from cost of developing biz as a WHOLE
ALWAYS EXPENSED
RESEARCH costs
UNLESS:
forms part of the cost
meets all recognition criteria
forms part of goodwill on BIZ COMB.
once expensed cannot be capitalise later on
INTERNALLY GENERATED IA
X meet definition and recognition criteria
INTERNALLY GENERATED GOODWILL
EXPENSED
WHY?
D
X identifiable
X control
✓ generate f.e.b
R
X measured realiably
✓ probable f.e.b
✓ meet definiiton and recognition criteria
INTERNALLY GENERATED IA OTHER THAN GOODWILL
DIFFICULT to asses R criteria
HENCE, additional requirement to classify asset generation into:
RESEARCH phase
DEFINITION
original+planned investigation to gain new scientific knowledge+understanding
UNCERTAIN f.e.b will flow (because it is merely and investigation)
EXPENSE | ASSET
EXAMPLES:
activities - new knowledge
search+evaluate - research findings
search - alt new&improved materials, products, process (MPP)
formulate+design+evaluate - alt MPP
Design+Construction+Testing - prototypes
D tools involving new tech
D+C+ operate - pilot plant
D+C+T - new&improved MPP
Recognised as ASSET if 6 criteria are met:
G- generate feb
A - ability to use
M - measured reliably
A - availability of resouce to complete
T - technical feasibility
I - intention to complete
IF ONE OR MORE NOT MET - EXPENSED !
recognised as asset meaning it meets the 2 asset recognition criteria- probable, reliably
DEVELOPMENT phase
DEFINITION
application of research findings -- plan production of new&improved items
MORE ADVANCED stage of creation
PROBABLE f.e.b flow
eg: exp on brands, trademarks, customer loyalty programme
USEFUL LIFE
FINITE
INDEFINITE
X ammortised
Test for impairment
annually
there is signs IA may be IMPAIRED
Useful life - reviewed each period : determine if indefinite life appropriate (IF NOT change acc to IAS 8)
✓ ammortised
Residual value = 0 , unless :
active market
commitment by 3rd party to PURCHASE
Amm. period+method: REVIEWED ANNUALLY ( acc to IAS 8)
RETIREMENT & DISPOSALS
Derecognised when :
disposal
NO expected feb
FORMULA: gain/loss = net proceed on disposal - CA ( cost/rev model)
Media attachments
Screenshot_2014-12-02_at_16.33.16 (image/png)
Screenshot_2014-12-02_at_16.44.29 (image/png)
Screenshot_2014-12-02_at_17.05.02 (image/png)
Screenshot_2014-12-02_at_17.26.07 (image/png)
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