Chapter11 Intangibles

Chapter 11

Intangibles
Intangibles

Contents
Contents
• 1. Introduction to intangibles
• 2. Identifiable intangible assets
• 3. Measurement of intangible assets subsequently to initial recognition
• 4. Disposal/ retirement of intangible assets 2

Contents
Contents
• 5. Unidentifiable intangible assets
－ goodwill
• 6. Disclosure of intangible assets
• 7. Other non-current assets

3

1.
1. Introduction
Introduction to to intangibles intangibles • Intangible assets, which generally result form legal or contractual rights, do not have a physical substance.
• Intangible and tangible non-current assets have characteristics in common:

4

1.
1. Introduction
Introduction to to intangibles intangibles • (a) are held for use and not for sale;
• (b) have an expected life of more than one year; • (c) derive their value from their ability to generate revenue;
• (d) are expensed by a company in the periods in which it receives their benefits, if the assets have finite lives.
5

Characteristics
Characteristics that that Distinguish
Distinguish Intangibles
Intangibles
•• There
There isis generally generally aa higher higher degree degree of of uncertainty uncertainty regarding regarding the the future future benefits benefits that that may may be be derived. derived. •• Their
Their value value isis subject subject to to wider wider fluctuations fluctuations because because itit may may depend depend to to aa considerable considerable extent extent on on competitive competitive conditions. conditions. •• They
They may may have have value value only only to to aa particular particular company. company. •• Goodwill
Goodwill and and intangible intangible assets assets with with indefinite indefinitelives livesare are not not expensed. expensed. 6

1.
1. Introduction
Introduction to to intangibles intangibles • Accounting terminology includes only noncurrent assets in intangible assets, Whereas legal terminology includes as intangibles all assets without physical substance.
•