Intangibles_slides

Intangibles_slides - Intangibles Typical coverage of US GAAP Characteristics Acquisition of intangibles Cost allocation Goodwill Research and

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Intangibles
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Intangibles Page 2 Typical coverage of US GAAP Characteristics Acquisition of intangibles: Purchased intangibles Internally created intangibles Types of intangibles Periodic valuation Carrying value Impairment Definition of impairment indicators Recognition Frequency of testing Determination Calculation Cost allocation Goodwill Research and development costs Other costs
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Intangibles Page 3 Executive summary IFRS permits periodic revaluation of intangible assets (except for goodwill) to fair value. US GAAP does not allow revaluation. IFRS has a one-step approach for determining the impairment of intangible assets while US GAAP has a two-step approach. In addition, the calculations to compute the amount of loss are different. IFRS allows for the reversal of impairment losses on intangible assets (except for goodwill) while this is prohibited under US GAAP. IFRS requires that development costs are capitalized when technical and economic feasibility of a project can be demonstrated in accordance with specific criteria. Under US GAAP, most types of development costs are expensed as incurred.
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Intangibles Page 4 Primary pronouncements US GAAP ASC 350, Intangibles – Goodwill and Other ASC 730, Research and Development ASC 985-20, Software-Costs of Software to Be Sold, Leased, or Marketed ASC 360, Property, Plant and Equipment IFRS IAS 38, Intangible Assets IAS 36, Impairment of Assets IFRS 3 , Business Combinations
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Intangibles Page 5 Progress on convergence In 2006, the FASB and the IASB agreed to converge their standards on intangible assets. However, in 2007 both Boards agreed not to add a project to their joint agenda. In 2008, the FASB indicated that it will consider in the future whether to undertake a project to eliminate the differences in the accounting for research and development costs by fully adopting IAS 38 at some point in the future. Impairment is one of the short-term convergence projects agreed to by the FASB and the IASB in their 2006 Memorandum of Understanding. At their joint meeting in April 2008, the Boards chose to defer work on this project.
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Intangibles Page 6 Characteristics The definition of intangible assets is non- monetary assets without physical substance. The recognition criteria require there be probable future economic benefits and costs that can be reliably measured. Similar Similar IFRS US GAAP
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Intangibles Page 7 Acquisition of intangibles Purchased intangibles In general, intangible assets that are acquired outside of a business combination are recognized at fair value at the time of acquisition. Direct costs of securing a patent, including an acquisition from others, are included in the cost.
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This note was uploaded on 09/30/2010 for the course ACCT 3311 taught by Professor Gregsommers during the Spring '10 term at Southern Methodist.

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Intangibles_slides - Intangibles Typical coverage of US GAAP Characteristics Acquisition of intangibles Cost allocation Goodwill Research and

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