Intangible Assets

Code: 1230
👁 Views: 109

Account Information

Financial Statement Statement of Financial Position
Normal Balance Debit

Definition

Non-physical assets owned by the company generating future economic benefits

Sub-accounts

1231

Patents

1232

Software

1233

Trademarks

1234

Goodwill

1235

Licenses

1236

Impairment of Intangible Assets

1238

Accumulated Amortization

📐 IFRS vs US GAAP Accounting Treatment

IFRS IAS 38 Intangible Assets
US GAAP ASC 350 Intangibles - Goodwill and Other
⚠️ Key Difference Between IFRS and US GAAP

IFRS capitalises development phase costs; GAAP generally expenses all internal development

❓ Frequently Asked Questions

Q: What are the recognition criteria for an intangible asset?

A: Must be identifiable (separable or arising from contractual rights), controlled by the entity, future economic benefits must flow, and cost must be reliably measurable.

Q: Are all intangible assets amortized?

A: Assets with finite lives (e.g., patents, licenses) are amortized. Assets with indefinite lives (e.g., some trademarks) are not amortized but are tested for impairment annually.

Q: How are intangible assets measured after initial recognition?

A: Two options: (1) Cost model (cost - accumulated amortization - impairment losses), (2) Revaluation model (fair value - subsequent amortization) provided an active market exists.