1B Notes

Assets

Definition: FEB, Control, Result of Past

Recognition: flow of FEB to entity, Cost or value can be reliably
measured

Intangible: must the definition criteria + identifiable criterion

Identifiable criterion separable from the entity and sold,
transferred or exchanged + arises from a contractual or legal
right
Examples; patents, licences, copyrights, franchises,
trademarks
Recognition: flow of FEB to entity, cost can be reliably
measured

Internally generated: separated into 2 phases; research and

development phase
Research; obtaining new knowledge, search from evaluation
and application of findings, search for alternatives/materials &
final selection of materials, design and formulation
Development; design and construction of proto-types/models,
design and tools involving new technology, design and
operation of pilot plant & design/construction/testing of a
chosen alternative for new or improved materials
Development costs can be capitalised if; feasibility of
completion, intention to complete, ability to use/sell, FEB,
availiability of sufficient resources for further development
and eventually sale/use, expenditure can be measured reliably
Internally generated brands, mastheads, publishing titles and
customer lists not recognised as assets + goodwill

PPE

Examples of costs directly attributable: cost of employee

benefits directly from acquisition, site preparation, testing of
functionality, delivery costs, installation costs, professional
fees

Revaluation of Tangibles
FV needs to be determined with references to an active
market (items traded are homogenous, buyers and seller can
be found at any time & prices are available to the public)

Impairment

If Recoverable amount < carrying value, then need to be

impaired
Reversal of impairment - DR Acc. Impairment, CR Gain on
reversal of impairment