Intangible Assets

Question 1

What is the standard

Answer 1

AASB 138: identifiable, non-monetary asset without physical substance

Question 2

Identification

Answer 2

1. separable from the entity, capable of being transferred

2. arises from a contractual or some other legal right

Question 3

Recognition (once meets definition must also meet the following)

Answer 3

• probably that future economic benefits attributable to the asset will flow to the entity
• cost of the asset can be measured reliably
• internally generated intangibles and research costs can’t be recognised

Question 4

Measurement

Answer 4

• asset must be measured initially at cost
• separate acquisition: cost can usually be measured reliably
• as part of a business combination
• government grants
• exchanges with another intangible
• internally generated

Question 5

Internally generated

Answer 5

• Technical feasibility
• Intention to complete and sell
• Ability to use or sell
• Existence of a market
• Availability of resource
• Ability to measure costs reliably

Question 6

Amortisation

Answer 6

Finite: amortisation principles aare the same as for depreciating PP&E
Infinite: no amortisation charge, subject to annual impairment test