Intangibles

Question 1

ASPE 3064 & IAS 38 - Intangibles difs

Answer 1

ASPE:

• can choose to cap/exp development costs
• don;t care about govt grants, impairment or residual values

Question 2

Research costs vs Development

Answer 2

R.C - Expensed
- getting the new knowledge, market analysis, evaluating findings

Dev. Costs - Cap if criteria met
- apply the research findings, design, testing, construct, labor

Question 3

What is the criteria of an intangible asset?

Answer 3

• Control (direct the use, get all benefits, prevent others from use) of resource n of access to benefits
• is it identifiable
• Economic Benefits
• Reliably Measured

Expense if not
Acquired separate;ly - cap

Question 4

Development Cost Criteria to Cap

Answer 4

1. Can it be completed?
2. Is there an intention to complete it
3. once complete, can it be sold? is there a mkt for it?
4. will it generate eco. benefits
5. is there sufficient money n resources?
6. Can the cost be reliably measured?
   finite life =
   depreciation
   RESIDUAL VALUE = 0 if not actively traded
   infinite = assess annually for impairment
   Dr. Research expenses
   Dr. Intangible asset
   Cr. Deferred
   development costs