1. WELCOME

2. Sl. No. Name ID.
1 Md. Moazzem Hossain 110106034
2 Md. Taijul Islam 110306009
3 Md. Mehedi Hasan 110306029

3. Presentation on
Intangible Assets

4. Course Instructor
Md. Kamruzzaman
Lecturer, Financial Reporting
Department of Business Administration (DBA)
Green University of Bangladesh (GUB)
Dhaka, Bangladesh.

5. Table of Contents
Sl. No. Name of Topic Slide No.
1 Definition of Intangible Assets 6
2 Recognition 7
3 Internally-Generated Intangibles 8
4 Identifiable vs. Unidentifiable 9
5 Amortisation 10
6 Goodwill 11
7 Separable Net Assets 12
8 Fair Value 13
9 Bad-Will 14
10 Purchased and Non-Purchased Goodwill 15
11 Useful life 16
12 Research 17
13 Development 18
14 Disclosure 19
15 Any Question? &Thank you 20 & 21

6. Definition of Intangible Assets
An intangible asset is an identifiable non-
monetary asset without physical substance
held for use in the production or supply of
goods or services, for rental to others, or for
administrative purposes.
To meet the definition the asset must be
identifiable, i.e. separable from rest of the
business or arising from legal rights.

7. Recognition
To be recognised in the financial
statements, an intangible asset must:
 Meet the definition of an intangible asset, and
 Meet the recognition criteria of the framework:
 It is probable that future economic benefits
attributable to the asset will flow to the entity
 The cost of the asset can be measured reliably.

8. Internally-Generated Intangibles
The following internally-generated items
may never be recognised:
• Goodwill
• Brands
• Mastheads
• Publishing titles
• Customer Lists
XYZ Co.
Balance Sheet
13/08/2014
Cash
Equipment 54
Goodwill 32,010
Patents 1,430

9. Identifiable vs. Unidentifiable
• Identifiable:
– Patents
– Copyrights
– Trade names, trade marks
– Secret formulas
– Franchise
– License
• Unidentifiable:
– Goodwill

10. Amortisation
• An intangible asset with a finite useful
life must be amortised over that life,
normally using the straight-line method
with a zero residual value.
• An intangible asset with an indefinite
useful life:
– Should not be amortised
– Should be tested for impairment annually, and more
often if there is an actual indication of possible
impairment.

11. Goodwill
Goodwill is the difference between
the value of business as the whole
and the aggregate of the fair values of
its separable net assets.

12. Separable Net Assets
Separable net assets are those assets (and
liabilities) which can be identified and sold
off separately without necessarily disposing
of the business as a whole. They include
identifiable intangibles such as patents,
licences and trade marks.

13. Fair Value
Fair value is the amount at which an asset
or liability could be exchanged in an arm’s
length transaction between informed and
willing parties, other than in a forced or
liquidation.

14. Bad-Will
The negative effect felt by a company when
shareholders and the investment community find
out that is has done something that is not in
accordance with good business practices.
Although typically not expressed in a dollar
amount, bad-will can play out in the form of
decreased revenue, loss of clients or suppliers,
loss of market share and federal indictments for
any crimes committed.

15. Purchased and Non-Purchased
Goodwill
• Purchased
– Arises when one business
acquires another as a going
concern
– Includes goodwill arising on
the consolidation of a
subsidiary or associated
company
– Will be recognised in the
financial statements as its
value at a particular point in
time is certain.
• Non-Purchased
– Is also known as inherent
goodwill
– Has no identifiable value
– Is not recognised in the
financial statements.

16. Useful life
Useful life is the period of time over which
an asset is expected to be used by the
entity.

17. Research
Research is original and planned
investigation undertaken with the prospect
of gaining new scientific or technical
knowledge and understanding

18. Development
Development is the application of research findings or
other knowledge to a plan or design for the production
of new or substantially improved materials, devices,
products, processes, systems or services prior to the
commencement of commercial production or use.

19. Disclosure
• The key disclosures required for
development costs are:
– The useful lives or the amortisation rates used for
assets with finite lives
– The amortisation methods used for assets with
finite lives
– The gross carrying amount and the accumulated
amortisation (aggregated with accumulated
impairment losses) at the beginning and end of the
period.

20. Any Question???

21. Thank You All…