Unformatted text preview: persuasive evidence that the useful life of an intangible asset will
be a specific period longer than 20 years. In these cases, IAS 38 requires an enterprise to:
(a) Amortize the intangible assets over the best estimate of its useful life;
(b) Estimate the recoverable amount of the intangible asset at least annually to identify
whether there is any impairment loss; and
(c) Disclose the reasons why the presumption that the useful life of an intangible asset will
not exceed 20 years is rebutted and the factor(s) that played a significant role in
determining the useful life of the intangible asset.
IAS 38 requires that the amortization method used should reflect the pattern in which the
asset's economic benefits are consumed by the enterprise. If that pattern cannot be determined
reliably, the straight-line method should be adopted. 28 European Union The Seventh Directive prohibits carrying consolidation goodwill as a permanent asset (i.e. as
a fixed asset without amortization) and requires that it be eliminated in one of the fol...
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