Intangible assets - identifiable, non-monetary assets without physical substance.
Definition criteria:
1. Identifiability
- Separable from the entity.
- Arises from legal rights.
2. Control
- Enjoy future economic benefits.
- Prevent others from obtaining such economic benefit.
3. Future economic benefit - additional sales, cost savings.
Recognize when:
1. It meets the definition criteria of intangible assets.
2. It meets the asset recognition criteria
a. Probable flow of future economic benefit from the asset.
b. Cost can be measure reliably.
Initial Measurement at Cost:
A. Acquisition
1. Separate Acquisition = Purchase Price + Directly Attributable Cost (DAC)
2. Business Combination = Fair value
3. Government Grant = Either Fair value or Nominal amount + DAC
4. Exchange Asset = Fair value, if none, carrying value
5. Internally Generated = DAC after meeting 6 criteria
B. Subsequent measurement at either:
1. Cost Model = Cost - Accumulated Depreciation - Accumulated Impairment Loss
2. Revaluation Model = Fair value - Subsequent Accumulated Depreciation - Subsequent
Accumulated Impairment Loss
*Subsequent expenditures are generally expensed unless it provides further economic benefits
such as extension of life, increase in net cash inflow, of improves the quality of output.
Definition criteria:
1. Identifiability
- Separable from the entity.
- Arises from legal rights.
2. Control
- Enjoy future economic benefits.
- Prevent others from obtaining such economic benefit.
3. Future economic benefit - additional sales, cost savings.
Recognize when:
1. It meets the definition criteria of intangible assets.
2. It meets the asset recognition criteria
a. Probable flow of future economic benefit from the asset.
b. Cost can be measure reliably.
Initial Measurement at Cost:
A. Acquisition
1. Separate Acquisition = Purchase Price + Directly Attributable Cost (DAC)
2. Business Combination = Fair value
3. Government Grant = Either Fair value or Nominal amount + DAC
4. Exchange Asset = Fair value, if none, carrying value
5. Internally Generated = DAC after meeting 6 criteria
B. Subsequent measurement at either:
1. Cost Model = Cost - Accumulated Depreciation - Accumulated Impairment Loss
2. Revaluation Model = Fair value - Subsequent Accumulated Depreciation - Subsequent
Accumulated Impairment Loss
*Subsequent expenditures are generally expensed unless it provides further economic benefits
such as extension of life, increase in net cash inflow, of improves the quality of output.
