Here, separable means selling, transferring, exchanging, renting and licensing. There is no contingency regarding they being separable or transferable. Similarly, the US GAAP categories of intangible assets: (1) Limited life intangible asset and (2) Indefinite life intangible asset. An intangible asset is an asset other than financial assets lacking physical appearance (SFAS 142 Glossary) and is separately distinguished from goodwill that is derived from any contractual or legal rights. These rights can be separated or transferred, sold, licensed, exchanged, rented. There is no contingency regarding they being separable or transferable. Contrast: In order to qualify as an asset under IFRS, the intangible right should be identifiable. It should have control as per the guidelines provided in IAS 38.113-.116. Another important benchmark to qualify as an asset, the intangible right’s cost should be measured in a reliable way (IAS 38.21) In case of an intangible asset that has been purchased or acquired through business combination, it is considered as a requisite condition that the asset will bring future economic benefits to the organization. In order to qualify as an asset under US GAAP, the intangible asset must have a relevant attribute that is measurable through reliable method (SFAC 5.63). It should be fully controlled by the enitty (SFAC 6.26). It should provide future economic benefits in shape of contribution to net cash flows as a mandatory attribute (SFAC 6.26). Should be an outcome of an already occurred event and information regarding it is neutral, representationally faithful, verifiable and relevant (SFAC 5.63). Part IB: Measurement of Intangible Assets under US GAAP and IFRS Under IFRS the intangible assets are measured as: (1) Development Costs: The development costs of intangible asset are capitalized if a number of criterion are met including intention, technical feasibility of completion, ability to use or sell, ability to generate future economic benefits, development resources availability and reliable measurement. (2) Acquisition Cost: Acquisition costs of both types of intangible assets are capitalized as intangible assets provided it meets all criterion of an intangible asset. There is no condition regarding their regulatory approval. (3) Advertising Costs: Promotional and advertising costs are expensed as incurred. Under IFRS the intangible assets are measured as: (1) Development Costs: The development costs related to intangible assets development are expensed at the time of their incurring except for activities having alternative future use. (2) Acquisition Cost: The acquisition cost associated with products that is under approval process are expensed. Others are capitalized. (3) Advertising Costs: Promotional and advertising costs are expensed as incurred or takes place initially. Part II: Financial Reporting Standards for the Impairment of Intangible Assets under US GAAP and IFRS US GAAP and IFRS both report impairment of non amortized goodwill and intangible assets and long lived assets through similar method. The non-amortized goodwill and intangible assets are impaired annually or regularly in case any indications to impairment exist. Long-lived assets other than non-amortized are impaired as and when the impairment exist. Conversely, IFRS reviews the non-amortized intangible assets and goodwill at cash generating unit or CGU. It is the smallest asset group generating cash independently. The
Intangible Assets Recognition and Measurement under US GAAP and IFRS Part IA: Recognition of Intangible Assets under US GAAP and IFRS Comparison: The IFRS recognizes two categories of intangible assets: (1) Internally created intangible assets and (2) Purchased intangible assets…
It is the largest automobile firm by the number of vehicle sales by the end of 2011. Currently, General Motors employs 202,000 employees and operates in 157 nations. The company manufactures cars and trucks in about 31 nations. Besides, the firm produces and sells vehicles in varying brands such as Cadillac, GMC, Opel, Buick, Holden and Chevrolet.
Eventually, the Financial Accounting Standards Board (FASB), which was established in 1973, codified the accounting standards which became widely acceptable accounting rules that used to prepare, present, and report financial statements for organizations, ranging from government institutions and private profit and not for profit organizations (Ball, 2006).
There are two types of assets in business, intangible assets and tangible assets. Tangible and intangible assets also have different methods of calculating their rate of depreciation thus it is absolutely necessary for accountants to differentiate them. A person dealing in accounting needs to carefully understand these two types of assets in order to help him record them properly.
With the passage of time, many accounting standers developed which brought certain degree of uniformity in the way of presenting the accounting information. But with the further development in industrial sector,
The goodwill is either derived from any contractual or other legal rights and the rights attached to the goodwill are separable and transferable. Here, separable means selling, transferring, exchanging, renting and licensing. There is no contingency regarding
In addition, revenue recognition only takes place at the time when the company will receive flow of future economic benefits. Another aspect of revenue recognition in IFRS is that when determining the nature of activities in long-term
counting follows uses the United States Generally Accepted Principles (GAAP) the principles contain guidelines regarding what can be capitalize in a company and how to go about it.
When a company incurs costs, it can either capitalize on those costs or expense the costs.
The purpose of GAAP is to offer common and accepted standard for assessing and comparing the financial health of businesses. But now a day’s U.S Securities and Exchange Commission has started to convert U.S Corporation from GAAP to International Financial Reporting
cial markets are responsible for allocation of capital resources and this process involves a large of decisions taken by fund providers (investors, lenders and financial institutions). Since most of these decisions involve financial information, they are presented in financial
13 pages (3250 words)Research Paper
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