Professional Documents
Culture Documents
Intangible
Assets
Philippine Accounting Standards (PAS) 38
Learning Objectives
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Objective
Scope
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Intangible assets
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Recognition
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Initial measurement
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Separate acquisition
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Separate acquisition -
Illustration
Royal Company purchased a new trademark and incurred the following
costs:
Purchase price 1,000,000
Non-refundable value added tax 50, 000
Training of personnel on the use of
new trademark 70,000
Research expenditures associated with the
purchase of the new trademark 240,000
Legal cost incurred to register the new trademark 105,000
Administrative salaries 120,000
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Acquisition by way of a
government grant
Intangible assets acquired by way of government grant
may be recorded at either:
1. fair value
2. alternatively, at nominal amount or zero, plus
direct costs incurred in preparing the asset for its
intended use
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Exchanges of assets
• If the exchange has commercial substance, the intangible asset is
initially recognized using the following order of priority:
a. Fair value of the asset Given up (Plus cash Paid or minus cash received)
b. Fair value of the asset Received
c. Carrying amount of the asset Given up (Plus cash Paid or minus cash
received)
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R&D Costs
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R&D Costs
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Subsequent expenditure
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Reinstatement of costs in
subsequent period
Expenditure on an intangible item that was initially
recognized as an expense shall not be recognized as part
of the cost of an intangible asset at a later date.
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Subsequent Measurement
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Amortization
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Amortization - Illustration
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Amortization - Illustration
Cost 300,000
Residual Amount -_
Depreciable amount 300,000
Divided by:
(Shorter of useful life and remaining legal life) 15
Annual Amortization Expense 20,000
Cost 300,000
Accumulated Depreciation (20,000 x 2 yrs) (40,000)
Carrying Amount at December 31, 2022 260,000
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Impairment
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Derecognition
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Disclosures
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Disclosures
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Disclosures
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