Intangible assets

Question 1

What are the criteria for it is recognized as an intangible asset?

Answer 1

1) Control
2) Probable
3) Reliable measure
4) Separable/Identifiable - Sold separately or legal right to benefits

Question 2

If you have control, it is probable, it is reliably measured, it has no legal right to benefit, however, it can be sold separately, is this an intangible asset?

Answer 2

Yes because it can have a legal right to benefit OR be sold separately and both do not have to meet the criteria.

Question 3

When can we recognize amortization cost?

Answer 3

Only if it a finite useful economic life

Question 4

What happens if there is indefinite economic life

Answer 4

Then check for impairment every year. The recoverable amount should higher of FV-CTS and VIU

Question 5

Can we recognize amortization if the asset is not being used?

Answer 5

No, the asset have to be used.

Question 6

When can revalue an intangible asset?

Answer 6

1) When there is an active market

2) An intangible asset is not unique

Question 7

What is the specific form of intangible assets?

Answer 7

Research and development

Question 8

How is research recognized?

Answer 8

It is expensed ( Recognise in I/S)

Question 9

How is development recognized?

Answer 9

It is expense unless it is meets the criteria below ( it then capitalised):

Probable economic future benefit
Intention to complete
Resources to complete
Ability to use it or sell it
Technically feasible
Expenditure be reliably measured

PIRATE - remember this