Intangible Assets

Question 1

Define Intangible Assets
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Answer 1

identifiable, non-monetary assets with no physical component
used in production process
administration
rentals to others
for more than one period

Question 2

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Answer 2

• separate: can be separate from the entity, therefore can be bought, sold, transferred, rented, licensed, etc
• gotten from contractual or other legal rights:

Question 3

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Answer 3

• identifiable and controlled by the entity
• probable that future economic benefits would come in
• cost can be reliably measured

Question 4

Internally Generated Intangible Asset. Define Research…and development

Answer 4

• original planned investigation done with the aim of gaining new knowledge or understanding
• application of research and other knowledge to production design, process improvement among others

Question 5

Conditions for capitalization of internally generated intangible assets (5)

Answer 5

• project is technically feasible
• entity intends to complete project and use to
• the asset would generate future benefits
• expenses for project can be reliably measured
• entity has the resources to complete the project

Question 6

Principles on intangible Assets (4)

Answer 6

• assets with finite useful life are to be amortized over the useful life based on expected pattern of benefit starting as soon as asset becomes available for use
• amortization period and method should be reviewed at the end of each reporting period
• assets without a finite useful life does not have definite period would not be amortized but subject to annual impairment review and checks to see if useful life can be determined (eg goodwill)
• Subsequent expenditure on intangible assets are usually expensed