Ch 12 IFRS Insights Flashcards
Similarities R&D GAAP and IFRS
Costs associated with R&D are segregated into 2 components
Costs in research phase are expensed
Similarities intangibles GAAP and IFRS 3 things
1 intangibles lack physical substance, aren’t financial
Instruments
2 recognize intangible separately from goodwill if
Intangible represents contractual or legal rights
3 companies recognize in-process R&D as separate
Intangible asset if it meets definition of intangible
And it’s fair value is measured reliably
Revaluation limited life intangible assets GAAP VS IFRS
IFRS permits revaluation of limited life intangibles
GAAP does not for goodwill and limited life intangibles
Treatment of internally generated intangibles: GAAP VS IFRS
IFRS permits some capitalization of internally generated
intangible assets
GAAP requires expensing of all costs associated with
Internally generated intangibles
Value in use
Future cashflows to be derived from particular assets
Discounted to present value
IFRS impairment test
Used each reporting date for long lived assets and intangibles
Records impairment if asset’s carrying amount exceeds
It’s recoverable amount
IFRS Recoverable amount
Higher of asset’s fair value less costs to sell and it’s
Value in use
GAAP impairment loss
Measured as excess of carrying amount over asset’s
Fair value
Impairment loss accounting of limited life intangible held for use?held for disposal? IFRS VS GAAP
IFRS allows reversal of impairment loss GAAP doesn’t
If intangibles held for disposal both GAAP and IFRS
Allow new cost basis for asset
IFRS costs in development phase of R&D
Are capitalized once technologically feasible
economic viability is achieved
Recoverable amount
Higher of fair value less costs to sell or value in use
Impairment loss
Impairment loss =
carrying amount - recoverable amt of impaired asset
