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Compose a 1500 words essay on Financial Reporting Project : Intangible Assets under U.S. GAAP and IFRS. Needs to be plagiarism free!Download file to see previous pages... Here, separable means selling
Compose a 1500 words essay on Financial Reporting Project : Intangible Assets under U.S. GAAP and IFRS. Needs to be plagiarism free!Download file to see previous pages...
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.