Intangible Assets and goodwill

Question 1

Intro

Answer 1

Define intangible assets- non monetary, hard go value difficult to account for
Asset def- iasb, 2010

Question 2

Asset def

Answer 2

IASB, 2010- resource controlled by an entity as a result of past event and from which economic benefit is expected

Question 3

Recognition criteria for intangible assets

Answer 3

Probable economic benefit
Valued reliably
Available resources to complete 
NONE from research- expense
Development-  if technically feasible can be completed and will be for sale
NONE for sales and marketing- expense

Question 4

Measurement- initial and subsequent

Answer 4

Initially- at cost, if purchased= price+ adjustments
If internally generated- recognition criteria

Subsequent- cost or revaluation model
Original cost -amortisation

Question 5

Impairment and amortisation

Answer 5

Impairment- indefinite economic life

Amortisation- set useful life

Question 6

Goodwill choices

Answer 6

Highest assets and equity/liabilities= treated as an asset

Impairment- less

Least- income statement- decreases profit for year
Benefit to companies- lower tax and better borrowing

Question 7

Intangible assets- research and development q’s things to watch out for

Answer 7

1. Sofp- balance b/f, don’t include overheads for uncertain years, take off accumulated amortisation from gross intangible assets
   2 income statement- revenue take off r+d from uncertain years and sales and marketing, take off amortisation (NOT accumulated

Question 8

Types of goodwill questions

Answer 8

When consolidation sofp- retained earnings is h only
Profit for year=h plus share in s profit for year
Non controlling interest- share in share capital retained earnings and profit for year