Chapter 8 Flashcards
What is an intangible asset?
Identifiable non-monetary asset without physical substance
What are some examples of intangible assets?
Licences and quotas
Intellectual property
Brand names
Trademarks
What must an intangible asset meet to be recognised?
Definition of intangible asset
Recognition criteria of the framework
What internally generated intangibles can not be recognised?
Goodwill
Brands
Publishing titles
Newspaper mastheads
Customer lists
Intellectual property
What are the two types of models you can use to account for intangible assets?
Cost model
Revaluation model
What should purchased intangibles be recognised at?
Cost
What is a cost model?
Intangible asset should be carried at cost less amortisation and only impairment losses
Asset with finite useful life must be amortised
Asset with indefinite useful life should not be amortised and tested for impairment annually
When are intangibles assets derecognised?
On disposal
No future economic benefit expected
What is revaluation model?
Intangible assets may be revalued to their fair value. Fair value determined by active market.
When does an active market exist?
Item traded are homogenous
Willing buyers and sellers
Prices available to public
What are research cost be recognised as?
Expenditure
When are development costs capatilised?
If criteria is met
What should we do with development expenditure?
Amortised over useful life as soon as production begins
