INTERNALLY GENERATED INTANGIBLE ASSETS

***DAC
1. Cost of materials, services used in generating the IA
2. Cost of employee benefits from generation IA
3. Fee to register a legal right
4. Amortization of patent used to generate the IA

*Goodwill -purchased
*Internally generated goodwill, brand, masthead, publishing title.
-expensed as incurred

AMORTIZATION
*limited finite life -subject to amortization
*indefinite useful life-subject to test of impairment

AMORTIZATION METHOD
*what shall reflect the pattern in which expected FEB will flow to the entity
*straight line method

RESIDUAL VALUE
*presumed to be zero
*exceptional cases:
1. when 3rd party comits to buy IA at end of useful life
2. when there is an active market for the IA
*residual value will be reviewed every year-end

RESEARCH AND DEVELOPMENTAL COSTS

Research stage/activities - expensed as incurred

Development costs - recognized only as IA if all of the following criteria are met:
1. The technical feasibility if completing the IA
2. The intention to complete the IA and use or sell it
3. The ability to use or sell the IA
4. How the IA will generate the probable future economic benefits
5. Availability of resources or funding to complete the development
6. The ability to measure reliably the expenditure during the development