This document summarizes key differences between IFRS and US GAAP regarding accounting for intangible assets. Some of the main points covered include:
- IFRS permits periodic revaluation of intangible assets to fair value, while US GAAP does not allow revaluation.
- IFRS requires capitalization of development costs when technical and economic feasibility can be demonstrated, while most development costs are expensed under US GAAP.
- There have been efforts to converge the standards but projects to fully eliminate differences have not been undertaken.
IAS 38 provides guidance on accounting for intangible assets. An intangible asset must be identifiable and controlled by the entity with probable future economic benefits to be recognized initially at cost. Expenditure on research must be expensed while development costs may be recognized as an asset if certain criteria are met. Intangible assets are subsequently measured using either the cost or revaluation model and are reviewed annually for impairment and changes in useful life. Disclosures include distinguishing between internally generated and other intangible assets, amortization methods used, and reconciliation of carrying amounts.
The document discusses the key aspects of IAS 38 - Intangible Assets including the scope, definition of an intangible asset, recognition, measurement, amortization, and disclosure requirements. It covers the initial recognition of intangible assets at cost and the subsequent measurement using either the cost or revaluation model. Internally generated intangible assets are recognized if certain criteria are met. Intangible assets with finite useful lives are amortized on a systematic basis over their useful lives while those with indefinite lives are tested annually for impairment.
Chap 6 - IAS 38 - Intangible Assets.pptxKashif Butt
IAS 38 establishes the accounting requirements for intangible assets. An intangible asset must be identifiable, controlled by the entity through custody or legal rights, and expected to generate future economic benefits. Intangible assets are initially measured at cost and can subsequently be measured either at cost or using the revaluation model. Research costs are expensed as incurred while development costs meeting certain criteria are recognized as intangible assets. Goodwill arising from a business combination is recognized as an asset at cost while internally generated goodwill is not recognized.
This document provides an overview of Ind AS 36 - Impairment of Assets. It begins with an agenda outlining the key topics to be covered, including objective and scope, definitions, recognition and measurement requirements, required disclosures, differences between Ind AS 36 and the corresponding Indian accounting standard AS 28, and the potential impact on ILGIC. Some of the main points covered include: assets within the scope of Ind AS 36, the definition of impairment and key terms, procedures for identifying and measuring impairment losses, impairment loss allocation methods, and additional annual testing required under Ind AS 36 for certain assets.
The document provides an overview of accounting for inventories under Ind AS 2. Some key points:
1. Inventories represent assets held for sale, in production, or to be consumed in production/rendering services. Objectives of Ind AS 2 are determining inventory cost and value, treatment on revenue recognition, and cost formulas.
2. Inventory cost includes purchase cost, conversion cost (direct labor, variable/fixed overheads), and other costs to bring inventory to present location/condition. Inventory is valued at lower of cost or net realizable value.
3. Net realizable value is estimated selling price less costs to sell. Inventories are written down to NRV if damaged, obsolete or if
This document summarizes key differences between IFRS and US GAAP regarding accounting for intangible assets. Some of the main points covered include:
- IFRS permits periodic revaluation of intangible assets to fair value, while US GAAP does not allow revaluation.
- IFRS requires capitalization of development costs when technical and economic feasibility can be demonstrated, while most development costs are expensed under US GAAP.
- There have been efforts to converge the standards but projects to fully eliminate differences have not been undertaken.
IAS 38 provides guidance on accounting for intangible assets. An intangible asset must be identifiable and controlled by the entity with probable future economic benefits to be recognized initially at cost. Expenditure on research must be expensed while development costs may be recognized as an asset if certain criteria are met. Intangible assets are subsequently measured using either the cost or revaluation model and are reviewed annually for impairment and changes in useful life. Disclosures include distinguishing between internally generated and other intangible assets, amortization methods used, and reconciliation of carrying amounts.
The document discusses the key aspects of IAS 38 - Intangible Assets including the scope, definition of an intangible asset, recognition, measurement, amortization, and disclosure requirements. It covers the initial recognition of intangible assets at cost and the subsequent measurement using either the cost or revaluation model. Internally generated intangible assets are recognized if certain criteria are met. Intangible assets with finite useful lives are amortized on a systematic basis over their useful lives while those with indefinite lives are tested annually for impairment.
Chap 6 - IAS 38 - Intangible Assets.pptxKashif Butt
IAS 38 establishes the accounting requirements for intangible assets. An intangible asset must be identifiable, controlled by the entity through custody or legal rights, and expected to generate future economic benefits. Intangible assets are initially measured at cost and can subsequently be measured either at cost or using the revaluation model. Research costs are expensed as incurred while development costs meeting certain criteria are recognized as intangible assets. Goodwill arising from a business combination is recognized as an asset at cost while internally generated goodwill is not recognized.
This document provides an overview of Ind AS 36 - Impairment of Assets. It begins with an agenda outlining the key topics to be covered, including objective and scope, definitions, recognition and measurement requirements, required disclosures, differences between Ind AS 36 and the corresponding Indian accounting standard AS 28, and the potential impact on ILGIC. Some of the main points covered include: assets within the scope of Ind AS 36, the definition of impairment and key terms, procedures for identifying and measuring impairment losses, impairment loss allocation methods, and additional annual testing required under Ind AS 36 for certain assets.
The document provides an overview of accounting for inventories under Ind AS 2. Some key points:
1. Inventories represent assets held for sale, in production, or to be consumed in production/rendering services. Objectives of Ind AS 2 are determining inventory cost and value, treatment on revenue recognition, and cost formulas.
2. Inventory cost includes purchase cost, conversion cost (direct labor, variable/fixed overheads), and other costs to bring inventory to present location/condition. Inventory is valued at lower of cost or net realizable value.
3. Net realizable value is estimated selling price less costs to sell. Inventories are written down to NRV if damaged, obsolete or if
Ind AS 115 Revenue from Contracts with Customersnitish aggarwal
Ind AS 115 provides principles for recognizing revenue from contracts with customers and will supersede Ind AS 11 and Ind AS 18. It outlines a five-step model for recognizing revenue that includes identifying the contract with the customer, identifying separate performance obligations, determining the transaction price, allocating the transaction price, and recognizing revenue when performance obligations are satisfied. The standard provides more specific guidance and requires significantly more disclosures. Technology and telecom companies are expected to be most impacted as it will change how they recognize revenue from bundling of services. India is considering deferring adoption of Ind AS 115 to allow more time for consultation and clarification.
This document provides an overview of Ind AS 38 on Intangible Assets. It discusses the objective and scope, key definitions, recognition and measurement criteria, disclosure requirements, and differences between Ind AS 38 and the previous Accounting Standard AS 26. Some of the key points covered include defining an intangible asset, the criteria for recognition of intangible assets, measurement at cost or revaluation model, amortization periods, impairment testing, and additional disclosures required under Ind AS 38.
This document provides an overview of IND AS 41 - Agriculture. It discusses the objective, scope, key definitions, recognition, measurement and disclosure requirements of the standard. The standard relates to accounting for agricultural activity, including biological assets and agricultural produce. It requires biological assets and agricultural produce to be measured at fair value less costs to sell, except when fair value cannot be measured reliably. The document provides examples of biological assets and the resulting agricultural produce, and outlines the recognition criteria and disclosures required by the standard.
This document provides an overview of Accounting Standard 10 (AS-10) regarding the accounting treatment of fixed assets. It defines fixed assets and outlines their presentation in financial statements using either historical cost or revalued amounts. The document discusses the calculation of historical cost, accounting for self-constructed and exchanged assets, and the treatment of revaluations. It also covers improvements, additions, disposals, and the required disclosures regarding fixed assets. The presentation was created by students at L.J Institute of Management Studies in Ahmedabad, Gujarat to explain AS-10 on accounting for fixed assets.
Indian Accounting Standards AS2 - Valuation of InventoriesAkhilesh Krishnan
This document summarizes Ind AS-2 regarding the valuation of inventories. It defines inventories as assets held for sale, in production, or as supplies. Inventories are valued at the lower of cost or net realizable value. Cost includes purchase costs, conversion costs, and other costs to bring inventories to their present condition. Common costing methods are specific identification, FIFO, and weighted average. The valuation method used must approximate actual costs.
- Ind AS 115 replaces existing revenue standards and provides a single comprehensive model for revenue recognition. It is effective for annual periods beginning on or after April 1, 2018.
- The key change under Ind AS 115 is the requirement to recognize revenue when a customer obtains control of promised goods or services rather than when risks and rewards are transferred. Control is defined as the ability to direct the use and obtain the benefits from the goods or services.
- Ind AS 115 introduces a five-step model for revenue recognition: 1) identify the contract with the customer, 2) identify separate performance obligations, 3) determine transaction price, 4) allocate transaction price to performance obligations, and 5) recognize revenue when performance obligations are
This document discusses IAS 38 on intangible assets. It defines intangible assets as identifiable non-monetary assets without physical substance, including software, patents, and copyrights. An intangible asset must be identifiable, provide control over future economic benefits, and exist to be recognized. Expenditures in the research phase are expensed, while those in the development phase may be recognized as an intangible asset if certain criteria are met. Intangible assets are initially measured at cost and can be carried under the cost or revaluation model, requiring amortization or impairment testing. Disclosures are also required regarding accounting policies, expenses, notes, and balance sheet amounts.
This document outlines the objective and scope of Indian Accounting Standard 107 on financial instruments disclosures. The objective is to require entities to provide disclosures that enable users to evaluate the significance of financial instruments for the entity's financial position and performance, and the nature and extent of risks from financial instruments. The standard complements recognition and measurement principles in other Indian Accounting Standards for financial assets and liabilities. It applies to all types of financial instruments except some interests in subsidiaries/associates, employee benefits, insurance contracts, and share-based payments. The standard requires disclosures by class of financial instrument, including carrying amounts of financial assets and liabilities in categories defined in Ind AS 39.
This document outlines accounting standards for valuing inventories. It defines inventories as assets held for sale, in production, or as materials used in production. Inventories should be valued at the lower of cost or net realizable value. Cost includes purchase price, conversion costs, and other costs to bring inventories to their present state. Net realizable value is estimated selling price less costs to complete and sell. Accepted cost flow methods for valuing inventories include FIFO, LIFO, and weighted average cost. Financial statements must disclose the accounting policy, cost formula used, and inventory classifications.
The document discusses IAS 38 and the accounting for intangible assets. It provides definitions and outlines the scope and recognition criteria for intangible assets according to IAS 38. Specifically, it states that an intangible asset must be identifiable, provide control over a resource, and generate future economic benefits to be recognized. It also notes that intangible assets acquired in a business combination form part of goodwill.
The presentation is an effort towards better understanding of the IAS-37, through the use of proper headings, bullets, key points and graphics where needed.
This document discusses accounting for property, plant, and equipment (PPE) under Indian Accounting Standard (Ind AS) 16. It covers topics such as the initial recognition and measurement of PPE, the cost model and revaluation model for subsequent measurement, depreciation, and impairment. It also provides examples of accounting entries for revaluation of PPE and disclosure requirements related to PPE under Ind AS 16.
Share-based payments refer to contracts where goods or services are received in exchange for equity instruments or cash based on equity values. Equity instruments include shares or options of the reporting entity, its parent, or subsidiaries. Ind AS 102 applies to share-based payment transactions, except those with shareholders or involving the acquisition of a business. Share-based payments can be settled via equity instruments or cash. Recognition involves recording an expense over the vesting period based on the fair value of instruments on the grant date. Disclosures are required to understand the nature and extent of share-based payment arrangements.
IFRS 3 establishes principles for accounting for business combinations. It requires acquirers to recognize identifiable assets acquired, liabilities assumed and any non-controlling interest at fair value. Goodwill is recognized as the excess of consideration transferred over the fair value of identifiable net assets. The acquisition method involves 4 steps - identifying the acquirer, determining the acquisition date, recognizing and measuring assets, liabilities and non-controlling interest, and recognizing and measuring goodwill or gain on bargain purchase. IFRS 3 also provides guidance on specific transactions like business combinations achieved in stages and accounting for acquisition costs.
IFRS 3 provides guidance on accounting for business combinations. It defines a business combination as the acquisition of one business by another. The standard outlines the acquisition method for accounting, which requires identifying the acquirer, determining the acquisition date, recognizing and measuring identifiable assets and liabilities, and recognizing goodwill or a gain from a bargain purchase. Consideration transferred in a business combination is measured at fair value. Exceptions to the recognition and measurement principles are provided for items such as income taxes, contingent liabilities, and share-based payments.
This document summarizes the key aspects of IAS 36 regarding impairment of assets. IAS 36 aims to ensure assets are not carried at more than their recoverable amount. It defines terms like carrying amount, cash-generating units and impairment loss. The standard outlines how to identify impaired assets, measure recoverable amount, recognize impairment losses, allocate losses to cash-generating units including goodwill, and reverse impairment losses. Entities must disclose impairment losses, reversals and reasons for changes in carrying amounts.
The document provides an overview of IAS 36 Impairment of Assets. Key points include:
1) IAS 36 provides guidance for determining when the carrying amount of an asset exceeds its recoverable amount and an impairment loss must be recognized. It excludes certain assets and requires annual impairment testing of goodwill and indefinite-lived intangible assets.
2) An impairment loss is recognized when the recoverable amount of an asset or cash-generating unit is less than its carrying amount. The recoverable amount is the higher of an asset's fair value less costs to sell or its value in use.
3) Impairment losses are allocated first to reduce the carrying amount of goodwill allocated to
This document discusses Ind AS-40, which relates to investment property. It defines investment property as property held to earn rentals or for capital appreciation rather than for use in production or sale. Examples provided include land held for appreciation and buildings held to be leased. It discusses initial and subsequent measurement of investment property at cost or fair value. Transfers to or from investment property require a change in use. Gains or losses on disposal are recognized in net income. Required disclosures include classification methods, fair value details, rental income and expenses, and restrictions.
This standard provides guidance on accounting for property, plant, and equipment. It defines property, plant, and equipment as tangible items held for use in production, rental, or administration that are expected to be used for more than one period. An item qualifies as an asset when future benefits are probable and cost can be reliably measured. After initial recognition at cost, items are carried either using the cost model (at cost less depreciation and impairment) or revaluation model (at fair value less depreciation and impairment). Depreciation is allocated systematically over an asset's useful life, and the carrying amount is derecognized when disposed of or no future benefits are expected.
Accounting for PPE, Intagibles and Impairment assets.pptxclaricesandro1
This document defines key terms and accounting standards related to intangible assets according to IAS 38. It provides definitions for intangible assets, identifiable assets, active markets, residual value, amortization, research and development. It outlines the recognition criteria for intangible assets and discusses the cost of separately acquired, exchange of assets, and internally generated intangible assets. The document also discusses intangible assets acquired in business combinations and government grants, and presents the cost and revaluation models for subsequent measurement.
Ind AS 115 Revenue from Contracts with Customersnitish aggarwal
Ind AS 115 provides principles for recognizing revenue from contracts with customers and will supersede Ind AS 11 and Ind AS 18. It outlines a five-step model for recognizing revenue that includes identifying the contract with the customer, identifying separate performance obligations, determining the transaction price, allocating the transaction price, and recognizing revenue when performance obligations are satisfied. The standard provides more specific guidance and requires significantly more disclosures. Technology and telecom companies are expected to be most impacted as it will change how they recognize revenue from bundling of services. India is considering deferring adoption of Ind AS 115 to allow more time for consultation and clarification.
This document provides an overview of Ind AS 38 on Intangible Assets. It discusses the objective and scope, key definitions, recognition and measurement criteria, disclosure requirements, and differences between Ind AS 38 and the previous Accounting Standard AS 26. Some of the key points covered include defining an intangible asset, the criteria for recognition of intangible assets, measurement at cost or revaluation model, amortization periods, impairment testing, and additional disclosures required under Ind AS 38.
This document provides an overview of IND AS 41 - Agriculture. It discusses the objective, scope, key definitions, recognition, measurement and disclosure requirements of the standard. The standard relates to accounting for agricultural activity, including biological assets and agricultural produce. It requires biological assets and agricultural produce to be measured at fair value less costs to sell, except when fair value cannot be measured reliably. The document provides examples of biological assets and the resulting agricultural produce, and outlines the recognition criteria and disclosures required by the standard.
This document provides an overview of Accounting Standard 10 (AS-10) regarding the accounting treatment of fixed assets. It defines fixed assets and outlines their presentation in financial statements using either historical cost or revalued amounts. The document discusses the calculation of historical cost, accounting for self-constructed and exchanged assets, and the treatment of revaluations. It also covers improvements, additions, disposals, and the required disclosures regarding fixed assets. The presentation was created by students at L.J Institute of Management Studies in Ahmedabad, Gujarat to explain AS-10 on accounting for fixed assets.
Indian Accounting Standards AS2 - Valuation of InventoriesAkhilesh Krishnan
This document summarizes Ind AS-2 regarding the valuation of inventories. It defines inventories as assets held for sale, in production, or as supplies. Inventories are valued at the lower of cost or net realizable value. Cost includes purchase costs, conversion costs, and other costs to bring inventories to their present condition. Common costing methods are specific identification, FIFO, and weighted average. The valuation method used must approximate actual costs.
- Ind AS 115 replaces existing revenue standards and provides a single comprehensive model for revenue recognition. It is effective for annual periods beginning on or after April 1, 2018.
- The key change under Ind AS 115 is the requirement to recognize revenue when a customer obtains control of promised goods or services rather than when risks and rewards are transferred. Control is defined as the ability to direct the use and obtain the benefits from the goods or services.
- Ind AS 115 introduces a five-step model for revenue recognition: 1) identify the contract with the customer, 2) identify separate performance obligations, 3) determine transaction price, 4) allocate transaction price to performance obligations, and 5) recognize revenue when performance obligations are
This document discusses IAS 38 on intangible assets. It defines intangible assets as identifiable non-monetary assets without physical substance, including software, patents, and copyrights. An intangible asset must be identifiable, provide control over future economic benefits, and exist to be recognized. Expenditures in the research phase are expensed, while those in the development phase may be recognized as an intangible asset if certain criteria are met. Intangible assets are initially measured at cost and can be carried under the cost or revaluation model, requiring amortization or impairment testing. Disclosures are also required regarding accounting policies, expenses, notes, and balance sheet amounts.
This document outlines the objective and scope of Indian Accounting Standard 107 on financial instruments disclosures. The objective is to require entities to provide disclosures that enable users to evaluate the significance of financial instruments for the entity's financial position and performance, and the nature and extent of risks from financial instruments. The standard complements recognition and measurement principles in other Indian Accounting Standards for financial assets and liabilities. It applies to all types of financial instruments except some interests in subsidiaries/associates, employee benefits, insurance contracts, and share-based payments. The standard requires disclosures by class of financial instrument, including carrying amounts of financial assets and liabilities in categories defined in Ind AS 39.
This document outlines accounting standards for valuing inventories. It defines inventories as assets held for sale, in production, or as materials used in production. Inventories should be valued at the lower of cost or net realizable value. Cost includes purchase price, conversion costs, and other costs to bring inventories to their present state. Net realizable value is estimated selling price less costs to complete and sell. Accepted cost flow methods for valuing inventories include FIFO, LIFO, and weighted average cost. Financial statements must disclose the accounting policy, cost formula used, and inventory classifications.
The document discusses IAS 38 and the accounting for intangible assets. It provides definitions and outlines the scope and recognition criteria for intangible assets according to IAS 38. Specifically, it states that an intangible asset must be identifiable, provide control over a resource, and generate future economic benefits to be recognized. It also notes that intangible assets acquired in a business combination form part of goodwill.
The presentation is an effort towards better understanding of the IAS-37, through the use of proper headings, bullets, key points and graphics where needed.
This document discusses accounting for property, plant, and equipment (PPE) under Indian Accounting Standard (Ind AS) 16. It covers topics such as the initial recognition and measurement of PPE, the cost model and revaluation model for subsequent measurement, depreciation, and impairment. It also provides examples of accounting entries for revaluation of PPE and disclosure requirements related to PPE under Ind AS 16.
Share-based payments refer to contracts where goods or services are received in exchange for equity instruments or cash based on equity values. Equity instruments include shares or options of the reporting entity, its parent, or subsidiaries. Ind AS 102 applies to share-based payment transactions, except those with shareholders or involving the acquisition of a business. Share-based payments can be settled via equity instruments or cash. Recognition involves recording an expense over the vesting period based on the fair value of instruments on the grant date. Disclosures are required to understand the nature and extent of share-based payment arrangements.
IFRS 3 establishes principles for accounting for business combinations. It requires acquirers to recognize identifiable assets acquired, liabilities assumed and any non-controlling interest at fair value. Goodwill is recognized as the excess of consideration transferred over the fair value of identifiable net assets. The acquisition method involves 4 steps - identifying the acquirer, determining the acquisition date, recognizing and measuring assets, liabilities and non-controlling interest, and recognizing and measuring goodwill or gain on bargain purchase. IFRS 3 also provides guidance on specific transactions like business combinations achieved in stages and accounting for acquisition costs.
IFRS 3 provides guidance on accounting for business combinations. It defines a business combination as the acquisition of one business by another. The standard outlines the acquisition method for accounting, which requires identifying the acquirer, determining the acquisition date, recognizing and measuring identifiable assets and liabilities, and recognizing goodwill or a gain from a bargain purchase. Consideration transferred in a business combination is measured at fair value. Exceptions to the recognition and measurement principles are provided for items such as income taxes, contingent liabilities, and share-based payments.
This document summarizes the key aspects of IAS 36 regarding impairment of assets. IAS 36 aims to ensure assets are not carried at more than their recoverable amount. It defines terms like carrying amount, cash-generating units and impairment loss. The standard outlines how to identify impaired assets, measure recoverable amount, recognize impairment losses, allocate losses to cash-generating units including goodwill, and reverse impairment losses. Entities must disclose impairment losses, reversals and reasons for changes in carrying amounts.
The document provides an overview of IAS 36 Impairment of Assets. Key points include:
1) IAS 36 provides guidance for determining when the carrying amount of an asset exceeds its recoverable amount and an impairment loss must be recognized. It excludes certain assets and requires annual impairment testing of goodwill and indefinite-lived intangible assets.
2) An impairment loss is recognized when the recoverable amount of an asset or cash-generating unit is less than its carrying amount. The recoverable amount is the higher of an asset's fair value less costs to sell or its value in use.
3) Impairment losses are allocated first to reduce the carrying amount of goodwill allocated to
This document discusses Ind AS-40, which relates to investment property. It defines investment property as property held to earn rentals or for capital appreciation rather than for use in production or sale. Examples provided include land held for appreciation and buildings held to be leased. It discusses initial and subsequent measurement of investment property at cost or fair value. Transfers to or from investment property require a change in use. Gains or losses on disposal are recognized in net income. Required disclosures include classification methods, fair value details, rental income and expenses, and restrictions.
This standard provides guidance on accounting for property, plant, and equipment. It defines property, plant, and equipment as tangible items held for use in production, rental, or administration that are expected to be used for more than one period. An item qualifies as an asset when future benefits are probable and cost can be reliably measured. After initial recognition at cost, items are carried either using the cost model (at cost less depreciation and impairment) or revaluation model (at fair value less depreciation and impairment). Depreciation is allocated systematically over an asset's useful life, and the carrying amount is derecognized when disposed of or no future benefits are expected.
Accounting for PPE, Intagibles and Impairment assets.pptxclaricesandro1
This document defines key terms and accounting standards related to intangible assets according to IAS 38. It provides definitions for intangible assets, identifiable assets, active markets, residual value, amortization, research and development. It outlines the recognition criteria for intangible assets and discusses the cost of separately acquired, exchange of assets, and internally generated intangible assets. The document also discusses intangible assets acquired in business combinations and government grants, and presents the cost and revaluation models for subsequent measurement.
Introduction : Investment in property and landMicha Paramitha
Investment in Property and Land discusses various types of investment property and land rights under Indonesian law. It defines investment property as property held to earn rentals or for capital appreciation rather than for use in production. The document outlines five types of land rights under Indonesian agrarian law: rights of ownership, rights of exploitation, rights to build, rights of use, and rights to operate. It also discusses factors that affect the selling price of property, including demand, supply, property restrictions/location/quality, and provides examples of relevant documents like IMB and PBB certificates.
The document provides an overview of accounting for intangible assets under IAS 38. It discusses the definition of intangible assets, recognition criteria, measurement at cost or fair value, amortization of intangible assets with finite useful lives, impairment testing, and disclosure requirements. The document also covers topics such as government grants, internally generated intangible assets, revaluation model, and differences between IFRS and Indian GAAP treatment of intangible assets.
Financial Reporting Assets and their Fair ValueMuzammilAbdul
- An entity is developing a new production process and incurred $1,000 of expenditures in 2015.
- $900 was spent before December 1, 2015 and $100 was spent between December 1-31, 2015.
- On December 1, 2015 the production process met the criteria for recognition as an intangible asset, with the know-how having a recoverable amount including future cash outflows to complete it.
The document discusses accounting standards for long-lived assets, including intangible assets. It notes that intangible assets are nonphysical assets that provide future economic benefits. The standard provides guidance on recognizing, measuring, and disclosing intangangible assets. It also discusses impairment testing of intangible assets to ensure they are carried at recoverable amounts. The standard applies to identifiable intangible assets and goodwill, but not to internally generated goodwill or brands.
1. The document provides notes to the condensed financial statements of a Local Government Unit (LGU) located east of Manila. It summarizes the LGU's profile, accounting policies, and significant accounting standards used to prepare its consolidated financial statements in accordance with Philippine Public Sector Accounting Standards.
2. The LGU operates several economic enterprises through special accounts in its General Fund, including hospitals, a university, entertainment venues, and public markets. It also has an interest in a joint venture that is proportionately consolidated in its financial statements.
3. The LGU's revenue recognition policies are described for various sources of revenue including taxes, transfers from other government entities, service fees, sales of goods, interest income
1. The document provides notes to the condensed financial statements of a Local Government Unit (LGU) located east of Manila. It summarizes the LGU's profile, accounting policies, and significant accounting standards used to prepare the financial statements.
2. The financial statements are prepared according to Philippine Public Sector Accounting Standards and presented in Philippine Pesos. The LGU maintains special funds for various economic enterprises and joint ventures that are proportionately consolidated.
3. Revenue is recognized from various sources such as taxes, fees, fines, transfers from other government entities, services, sales of goods, and rental income according to standards for exchange and non-exchange transactions. Significant accounting policies are provided for investment property,
IAS 39 establishes principles for recognizing and measuring financial assets, financial liabilities, and some contracts to buy or sell non-financial items. It aims to classify financial instruments into appropriate measurement categories and provides guidance on recognizing and derecognizing financial instruments, impairment of financial assets, and hedge accounting. IAS 39 has been replaced by IFRS 9 for annual periods beginning on or after January 1, 2013, though parts of IAS 39 remain in effect until fully replaced by future phases of IFRS 9.
IAS 16 provides the accounting requirements for property, plant, and equipment (PP&E). It requires PP&E to be recognized as an asset if it meets the definition of an asset and the recognition criteria. The standard addresses the initial measurement and subsequent accounting for PP&E, including depreciation, impairment losses, and derecognition. It also provides guidance on the choice between the cost model or revaluation model for subsequent measurement.
The document discusses the valuation of different types of assets. It defines assets as future services or benefits that are legally secured to an individual or firm. Assets are classified as fixed assets, current assets, wasting assets, intangible assets, and investments. Fixed assets are valued at historical cost less depreciation. Current assets are valued at the lower of cost or market value. Wasting assets are valued at cost less depletion. Intangible assets are valued at cost less amortization.
Ias 16 property plant and equipment-presentationShadabAhmadFaiq
The document discusses the key aspects of IAS 16 Property, Plant and Equipment including:
- The objective is to prescribe the accounting treatment for property, plant and equipment.
- Scope outlines what is excluded like IFRS 5 and IAS 40.
- Definitions for terms like PPE, carrying amount, depreciation.
- Recognition criteria that future benefits are probable and cost can be reliably measured.
- Measurement includes initial cost and subsequent cost model or revaluation model.
- Depreciation is systematically allocated over useful life.
- Impairment is assessed using IAS 36.
- Derecognition occurs from disposal or no future benefits are expected.
This standard outlines the accounting treatment and disclosure requirements for investment property. It defines investment property as property held to earn rentals or for capital appreciation rather than for short-term sale or use in production. The standard specifies that investment property is initially recognized at cost and can be subsequently measured using either the cost or fair value model. It also provides guidance on transfers to or from investment property, disposal of investment property, and impairment of investment property. Extensive disclosure requirements are specified regarding investment property balances, fair values, rental income and expenses, and restrictions.
Khalid Aziz offers coaching classes for commerce students studying various subjects including accounting, economics, business mathematics, and statistics. He also provides coaching for professional qualifications like ICMAP, ICAP, ACCA, CAT, and MA-Economics. Khalid Aziz has over 12 years of coaching experience and 100% student success rates in 2011-2012. He can be contacted at his listed address and phone number in Karachi, Pakistan.
Chap 3 Fin Rep Prop Plant and Equip - IAS 16.pptKashif Butt
IAS 16 provides guidance on accounting for property, plant, and equipment. It requires that such assets be initially measured at cost and subsequently measured either using the cost model (cost less accumulated depreciation and impairment losses) or revaluation model. The standard specifies how to recognize, measure, depreciate, and disclose information related to an entity's property, plant, and equipment.
Research MemorandumToCEO, CFO, and Controller of XYZ Research .docxdebishakespeare
Research Memorandum
To: CEO, CFO, and Controller of XYZ Research Company, Inc.
From: Nathan Ellery, Research Analyst
Date: August 22, 2013
RE: Accounting for Patents
Facts:
XYZ Research Company, incorporated in 2010, develops new technology for interplanetary exploration. The company holds many patents, and has historically expensed the costs associated with the patents.
Issues:
1. How are patents accounted for according to GAAP?
2. What is impairment testing, and does it apply to the patents held by XYZ Research Company?
3. Can a company capitalize their patents?
4. Are there any unique situations or exclusions for the industry (technology, or interplanetary exploration), in regards to accounting methods?
5. What corrective action, if any, is recommended to correct any misstatements made with regard to their patents?
Authorities on Accounting for Patents (Intangible Assets):
ASC 350-30-45-1 states that at a minimum, all intangible assets shall be aggregated and presented as a separate line item in the statement of financial position. However, that requirement does not preclude presentation of individual intangible assets or classes of intangible assets as separate line items.
ASC 350-30-45-2 states that the amortization expense and impairment losses for intangible assets shall be presented in income statement line items within continuing operations as deemed appropriate for each entity.
ASC 350-30-35-1 states that the accounting for a recognized intangible asset is based on its useful life to the reporting entity. An intangible asset with a finite useful life shall be amortized; an intangible asset with an indefinite useful life shall not be amortized.
ASC 350-30-35-2 states that the useful life of an intangible asset to an entity is the period over which the asset is expected to contribute directly or indirectly to the future cash flows of that entity.
ASC 350-30-35-15 states that if an intangible asset is determined to have an indefinite useful life, it shall not be amortized until its useful life is determined to be no longer indefinite.
ASC 350-30-35-16 states that an entity shall evaluate the remaining useful life of an intangible asset that is not being amortized each reporting period to determine whether events and circumstances continue to support an indefinite useful life.
ASC 350-30-35-17 states that if an intangible asset that is not being amortized is subsequently determined to have a finite useful life, the asset shall be tested for impairment in accordance with paragraphs 350-30-35-18 through 35-19. That intangible asset shall then be amortized prospectively over its estimated remaining useful life and accounted for in the same manner as other intangible assets that are subject to amortization.
ASC 350-30-35-18 states that an intangible asset that is not subject to amortization shall be tested for impairment annually and more frequently if events or changes in circumstances indicate that it is more likely t ...
This document provides an assignment on intangible assets according to IAS 38 for a financial reporting course. It includes a title page, table of contents, transmittal letter, acknowledgements, and executive summary. The body defines intangible assets and provides an overview of IAS 38. It then covers the classification, types, initial recognition, impairment testing, and disclosure requirements for intangible assets according to IAS 38. Specific sections address goodwill, impairment of indefinite-life intangibles, and internally generated intangible assets. The document concludes with a bibliography.
The document discusses the accounting standard for impairment of assets (IAS 36). It defines key terms like impairment loss, carrying amount, recoverable amount. The objective is to ensure assets are not carried at more than their recoverable amount. Assets are tested for impairment if internal or external factors indicate impairment. Recoverable amount is the higher of fair value less costs of disposal or value in use. An impairment loss is recognized in profit/loss for assets using cost model or by reducing revaluation surplus for assets using revaluation model.
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How to Setup Warehouse & Location in Odoo 17 InventoryCeline George
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2. AGENDA
O INTANGIBLE ASSET
O RECOGNITION AND MEASUREMENT
O SEPARATE ACQUISITION
O INTERNALLY GENERATED GOODWILL,
BRAND, ETC.
O USEFULL LIFE
O RESIDUAL VALUE
O DISPIOSAL AND RETIREMENT
4. INTANGIBLE ASSET
An intangible asset is an identifiable non-monetary asset without
physical substance.
Monetary assets are money held and assets to be received in fixed or
determinable amounts of money.
Amortisation is the systematic allocation of the depreciable amount
of an intangible asset over its useful life.
An asset is a resource:
O controlled by an entity as a result of past events; and
O from which future economic benefits are expected to flow to the
entity.
5. IDENTIFIABILITY
An asset is identifiable if it either:
Is separable, i.e is capable of being separated or
divided from the entity and sold, transferred,
licensed, rented or exchanged, either individually or
together with a related contract, identifiable asset or
liability, regardless of whether the entity intends to
do so; or
Arises from contractual or other legal rights,
regardless of whether those rights are transferable or
separable from the entity or from other rights and
obligations.
6. CONTROL
An entity controls an asset if the entity has the
power
O to obtain the future economic benefits flowing
from the underlying resource and
O to restrict the access of others to those
benefits.
7. FUTURE ECONOMIC BENFIT
Intangible asset may include revenue from the
O sale of products or services,
O cost savings, or
O other benefits resulting from the use of the
asset by the entity
8. RECOGNITION AND
MEASUREMENT
An intangible asset shall be recognised if, and
only if:
(a) it is probable that the expected future
economic benefits that are attributable to the
asset will flow to the entity; and
(b) the cost of the asset can be measured
reliably.
An intangible asset shall be measured initially at
cost.
9. SEPARATE ACQUISITION
The cost comprises:
O its purchase price,
O any directly attributable cost of preparing the Asset for
its intended use.
Directly attributable costs are:
O costs of employee benefits
O professional fees
O costs of testing
10. SEPARATE
ACQUISITION(cont.)
Expenditures that are not part of the cost of an
intangible asset are:
O costs of introducing a new product or service
(including costs of advertising and
promotional activities);
O costs of conducting business in a new location
or with a new class of customer (including
costs of staff training);and
O administration and other general overhead
costs.
11. SEPARATE
ACQUISITION(cont.)
Ceases when the asset is
In the condition necessary for it to be capable of
operating
In the manner intended by management.
Costs are not included in the carrying amount of an
intangible asset:
O costs incurred while an asset capable of operating
in the manner intended by management has yet to
be brought into use; and
O initial operating losses, such as those incurred
while demand for the asset’s output builds up.
12. INTERNALLY GENARATTED
GOODWILL,BRAND ETC.
Internally generated goodwill shall not be
recognised as an asset.
Internally generated brands, mastheads,
publishing titles, customer lists and items
similar in substance shall not be recognised as
intangible assets.
13. USEFUL LIFE
Useful life is:
O the period over which an asset is expected to be available for use by an
entity; or
O the number of production or similar units expected to be obtained
from the asset by an entity.
Useful life of an intangible asset may be
O Finite (the length of, or number of production or similar units),or
O Indefinite (analysis of all of the relevant factors, there is no
foreseeable limit to the period over which the asset is expected to
generate net cash inflows for the entity)
14. FINITE USEFUL LIFE
Amortisation shall begin when the asset is available for use, i.e. when it is in the
location and condition necessary for it to be capable of operating in the manner
intended by management.
Amortisation shall cease at the earlier of the date that the asset is classified as held
for sale and the date that the asset is derecognised.
The amortisation method used shall reflect the pattern in which the asset’s future
economic benefits are expected to be consumed by the entity.(otherwise straight
line)
The amortisation charge for each period shall be recognised in profit or loss unless
his or another Standard permits or requires it to be included in the carrying amount
of another asset.
15. INDEFINITE USEFUL LIFE
An intangible asset with an indefinite useful life
shall not be amortised.
In accordance with IAS 36, an entity is required to
test an intangible asset with an indefinite useful life
for impairment by comparing its recoverable
amount with its carrying amount
O annually, and
O whenever there is an indication that the intangible
asset may be impaired.
16. RESIDUAL VALUE
The residual value of an intangible asset with a finite useful life
shall be assumed to be zero unless:
O there is a commitment by a third party to purchase the asset at
the end of its useful life; or
O there is an active market for the asset and:
(i) residual value can be determined by reference to that
market; and
(ii) it is probable that such a market will exist at the end of the
asset’s useful life.
17. DEFINITIONS
An active market is a market in which all the
following conditions exist:
O the items traded in the market are homogeneous;
O willing buyers and sellers can normally be found
at any time; and
O prices are available to the public.
18. DISPOSAL AND RETIREMENT
An intangible asset shall be derecognised:
O on disposal; or
O when no future economic benefits are expected from its use or
disposal.
The gain or loss arising from the derecognition of an intangible
asset shall be determined as the difference between the net
disposal proceeds, if any, and the carrying amount of the asset.
It shall be recognised in profit or loss when the asset is
derecognised (unless IAS 17 requires otherwise on a sale and
leaseback).
Gains shall not be classified as revenue.