11. Intangible Assets Flashcards
1
Q
What is an intangible asset?
A
An identifiable (separable) non-monetary asset without physical substance
2
Q
Why can internally generated assets such as brand not be recognised as intangible assets?
A
Their cost cannot be reliably measured
3
Q
Why can advertising costs not be recognised as intangible assets?
A
There is no guarantee that future economic benefit will arise
4
Q
How are intangible assets purchased as part of a business combination recognised?
A
At fair value, if they are separable
5
Q
Can research and development costs be capitalised?
A
Research = no, development = yes
6
Q
What 6 criteria must spend meet in order to be capitalised as development costs?
A
Probable future economic benefit Intention to complete / sell asset Resources adequate and available Ability to use/sell the asset Technical feasibility Expenditure reliably measured
7
Q
What is ‘depreciation’ on intangible assets referred to as?
A
Amortisation
