11-2 Recognition ans Measurement of Intangible Assets
The basis of valuation for intangible assets is cost-the amount of cash or cash equivalents paid or the fair value of other consideration given to acquire an asset at the time of its acquisition or construction, or when applicable, the amount attributed to that asset when initially recognized. The term amortization is used to describe the write-off-expense of the cost of an intangible asset over its useful life
In brief, intangible assets are assets which are used in the operation of the business but which have no physical substance and are noncurrent.
Not all assets which lack physical substance are regardeFuture Economic Benefits
Future economic benefits include not only future revenue from the sale of products or services but also cost savings.
11-2 Recognition ans Measurement of Intangible Assets
An item that meets the definition of an intangible asset should only be recognized if:
it is probable that the expected future economic benefits that are attributable to the asset will flow to the enity; the cost of the asset can be measured reliably;
Control
Control is defined as the power to obtain the future economic benefits generated by the resource and the ability to deny access to those benefits to others.
Key Terms
patent (专利)
trademark (商标)
franchise (特许权) deferred charge (递延费用) start-up costs (生产准备成本) organization costs (开办费) research and development cost (研究与开发支出) goodwill (商誉) natural resources (自然资源)
Recognition of intangible assets is based on a general recognition principle that applies to costs incurred initially to acquire or internally generate an intangible asset and those incurred subsequently to add to, replace part of, or service it.
Unit 11 Intangible Assets and Natural Resources
Learning Objectives
After studying this unit, you should be able to:
1. Define intangible assets. Specify the three requirements one item must meet to be an intangible asset. 2. Identify the most common examples of intangible assets. 3. Explai the recognition and valuation of intangible assets. 4. Define deferred charges and make distinctions between deferred charges and intangible assets. 5. State the accounting treatments of research and development costs. 6. Explain the similarities and differences between goodwill and intangible assets. 7. Define natural resources and explain the accounting for natural resources.
11-1 Defination of Intangible Assets
Intangible assets from a subsection of this group and are further defined as identifiable non-monetary assets without physical substance. The definition of an intangible asset requires identifiability, control and the existence of future economic benefits.
11-1 Defination of Intangible Assets
Identifiability
An intangible asset meets the identifiability criterion when it : (1) is separable; (2) arises from constractual or other legal rights.