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(Financial Accounting & Reporting 1B) : Lecture Aid
(Financial Accounting & Reporting 1B) : Lecture Aid
Reporting 1B)
LECTURE AID
2017
Learning Competencies
• Define Intangible asset.
• State the initial measurement of intangible assets
that are (a) externally acquired and (b) internally
developed.
• State the subsequent measurement of intangible
assets that (a) have finite useful life and (b)
indefinite useful life.
• Account for subsequent expenditures on intangible
assets.
• Give examples of intangible assets within the scope
of PAS 38 and explain their accounting
requirements.
IFA PART 1A: Zeus Vernon B. Millan
Intangible assets
• An intangible asset is an identifiable non-monetary asset
without physical substance.
• If the exchange has lacks commercial substance, the intangible asset is initially
recognized using (c) above.
(HINT: R&D expense relates to something that is still in the process of being invented. It does not
relate to periodic changes to an existing product . The following terms generally indicate that a
cost is not an R&D expense: ‘commercial,’ ‘customer,’ ‘advertising’ and ‘market’.)
Application
• Patent
• Copyright
• Franchise
• Trademark or brandname
• Leasehold or lease right
• Computer software
• Broadcasting license, airline right and fishing right
• The recoverable amount of the intangible asset is the higher between fair
value less cost of disposal and value in use.