Intangible Asset (Pre-fi) Flashcards
It is an identifiable non-monetary asset without physical substance
Intangible Asset
It must be separable from other assets and must arise from any legal or contractual rights
Identifiability
It means the company has the power to obtain benefit from the asset
Control
These are future revenues or reduction in the future costs that can be obtained in using the asset
Future economic benefits
These are primarily used in the marketing promotion of products or services (ex. trademarks,newspapers and non competition agreements)
Marketing-related intangible assets
These are the result of interactions with outside parties (ex. customer lists, order or production backlogs)
Customer-related intangible assets
These are involve ownership rights to plays, literary works, musical works, pictures, photographs and videos. Copy rights protect these ownership rights.
Artistic-related intangible assets
These represent the value of rights that arise from contractual arrangements (ex. franchise and licensing agreements)
Contract-related intangible assets
These relate to innovations or technological advances (ex. patented technology and trade secrets)
Technology-related intangible assets
This type of intangible asset represents the future economic benefits arising from the other assets acquired in a business combination, which are not individually identified and separately recognized. It is often called the most intangible of the intangibles.
Goodwill
This are money held and assets received in fixed or determinable amounts of money
Monetary assets
In this phase, an entity cannot demonstrate that intangible asset exists and expenditures on this phase are expensed immediately
Research phase
In this phase, an entity can, in some instances, identify an intangible asset and demonstrate that the asset will generate probable future economic benefits
Development phase
This is derived from a right granted to the entity or person
Identifiable intangible assets
This comprise goodwill and internally generated and purchased intangibles that do not have specific cost or have cost, but unreliable
Unidentifiable intangible assets
Under this model, after initial recognition, an inthangible asset shall be carried at its cost less any accumulated amortization less any accumulated impairment losses
Cost model
Under this model, after initial recognition, an intangible asset shall be carried at a revalued amount, being its fair value at the date of the revaluation less any subsequent accumulated amortization and any subsequent impairment losses
Revaluation model
The depreciable amount of an intangible asset with a finite useful life shall be allocated on a systematic basis over its useful life
Amortization period
This method shall reflect the pattern in which the asset’s future economic benefits are expected to be consumed by the entity
Amortization method
This is not a subject to amortization but is tested for impairment at least annually, or more frequently, if there is an indication for impairment
Goodwill
It is the smallest group of assets that generate an independent cash flow
Cash-Generating Unit
It is the higher of the cash generating unit’s fair value less cost to sell and its value in use
Recoverable amount of CGU
It is the excess of carrying value over its recoverable amount
Impairment loss of CGU
On the date of derecognition, gain or loss should be recognized in profit or loss for any difference between?
Net disposal proceeds and carrying amount of the asset
Cost of a separately acquired intangible asset comprises: it’s purchase price, plus any duties and non-refundable taxes, less discounts and rebates; and any directly attributable costs of preparing the asset for its intended use
Separate acquisition
A company incurs costs in developing an asset without physical substance
Internally generated intangible asset
The cost of that intangible asset is it fair value at the acquisition date
Acquisition as part of a business combination
An intangible asset may be acquired free of charge, or for nominal consideration
Acquisition by way of a government grant
It should be recognized initially at fair value
Acquisition by exchanges of asset
It is an intangible asset with a finite useful life shall be assumed to be zero
Residual value
It is composed of only those asset that can be attributed directly, or allocated reasonably
Carrying value of CGU
