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7 Cards in this Set
- Front
- Back
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Define intangible asset.
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An identifiable non-monetary asset without physical substance.
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Name an 3 examples of intangible assets.
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Scientific or technical knowledge
Design and implementation of processes Licenses Intellectual property Market knowledge Trademarks including brand names Computer software Patents and copyrights Customer lists NB - Goodwill is not covered |
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What are the 3 key elements of an intangible asset?
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IDENTIFIABILITY - asset is separate from the owner and capable of being sold or arises from legal rights
CONTROL - the entity has the power to obtain future economic benefits from the asset FUTURE ECONOMIC BENEFITS - include revenue from sale of products, cost savings or other benefits |
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When should an intangible asset be recognised in the financial statements?
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When it's probable future economic benefits will flow to the entity
When the cost of the asset can be measured reliably |
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Define research.
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Original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding.
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Define development.
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The application of research findings to a plan or design for the production of new or substantially improved materials, devices, products, processes, systems or services before the start of commercial production or use.
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What are the 2 ways of classifying the useful life of an intangible asset?
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FINITE - having a limited useful life
INDEFINATE - having no foreseeable limit to the period over which the asset is expected to generate net cash inflows. |
