intangible assets (AS 38)

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  1. definition
    • identifiable (separable, from right)
    • without physical substance
  2. definition - analysis
    • presence() of legal or contractual right
    • sufficient control over the expected future economic benefits arising from the asset
  3. initial recognition criteria
    • 1. meeting the IA definition(separable*)
    • 2. future economic benefits will flow to the entity
    • 3. the cost can be measured reliably
    • *internally generated IA is not separable from cost of developing business as a whole
  4. initial recognition criteria - research phase and development phase
    • research - expensed b/c cannot demonstrate it will generate benefits
    • if the two phase cannot be distinguished, treats the expenditure on the project as if it were incurred in research phase only
    • recognize only expenditure in development phase as IA if all 6 criterias met (eg. generating revenue)
    • capitalize only the cost incurred after meeting 6 criteria
    • include only the cost attributable to IA
    • development cost previously recognized as expense cannot be reinstated as asset
  5. initial recognition - measurement
    • 1. purchase price (non refundable tax)
    • 2. cost directly attributable to bringing to asset to usable location and condition
  6. subsequent measurement - subsequent expenditures and models
    • subsequent expenditures : most likely for maintaining the IA, expensed
    • models: cost or revaluation (same as PPE)
  7. finite life - residual value
    • assumed to be zero unless:
    • 1. commitment by 3rd party to purchse
    • 2. active market
  8. indefinite life - treatment about amortization, impairment and review of indefinite life
    • amortization: will not be amortized until useful life determined to be finite
    • impairment test- when: annually or whenever there is an indicator of impairment (reassess useful life of IA as finite rather than indefinite is an indicator)
    • review of infinite life: annual, change from indefinite to finite is accounted for as change in accounting estimate
  9. derecognition of PPE - when
    • on disposal
    • no future economic benefits expected from its use or disposal
Card Set:
intangible assets (AS 38)
2016-10-10 10:12:51
intangible assets 38

intangible assets (AS 38)
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