Ch 12 IFRS Insights Flashcards Preview

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Flashcards in Ch 12 IFRS Insights Deck (12):

Similarities intangibles GAAP and IFRS 3 things

1 intangibles lack physical substance, aren't financial
2 recognize intangible separately from goodwill if
Intangible represents contractual or legal rights
3 companies recognize in-process R&D as separate
Intangible asset if it meets definition of intangible
And it's fair value is measured reliably


Similarities R&D GAAP and IFRS

Costs associated with R&D are segregated into 2 components

Costs in research phase are expensed


Revaluation limited life intangible assets GAAP VS IFRS

IFRS permits revaluation of limited life intangibles

GAAP does not for goodwill and limited life intangibles


Treatment of internally generated intangibles: GAAP VS IFRS

IFRS permits some capitalization of internally generated
intangible assets

GAAP requires expensing of all costs associated with
Internally generated intangibles


Value in use

Future cashflows to be derived from particular assets
Discounted to present value


IFRS impairment test

Used each reporting date for long lived assets and intangibles

Records impairment if asset's carrying amount exceeds
It's recoverable amount


IFRS Recoverable amount

Higher of asset's fair value less costs to sell and it's
Value in use


GAAP impairment loss

Measured as excess of carrying amount over asset's
Fair value


Impairment loss accounting of limited life intangible held for use?held for disposal? IFRS VS GAAP

IFRS allows reversal of impairment loss GAAP doesn't

If intangibles held for disposal both GAAP and IFRS
Allow new cost basis for asset


IFRS costs in development phase of R&D

Are capitalized once technologically feasible
(economic viability is achieved)


Recoverable amount

Higher of fair value less costs to sell or value in use


Impairment loss

Impairment loss =
carrying amount - recoverable amt of impaired asset