Internally Generated Intangibles Handled Under IFRS - 550 Words

How are Internally Generated Intangibles Handled Under IFRS? (Coursework Sample) Content: How are internally generated intangibles handled under IFRS? How does this differ from U.S. GAAP?The differences between International Financial Reporting Standards (IFRSs) and United States Generally Accepted Accounting Principles (U.S. GAAP) are classified according to the differences in definition, recognition, measurement, alternatives, guidance, presentation and disclosure. Under both IFRS and U.S. GAAP both define intangibles assets as assets without physical substance. However, there are differences as pertains how the intangibles are re-valued, recognition of research and development costs. Under IAS 38, Intangible Assets, the requirements for intangible assets dictate that research expenses are expensed while costs for development can be capitalized if the entity shows; it has the technical feasibility, intention and adequate resources to develop or complete the intangible asset; that the asset will generate future economic benefit; and that the entity has th e ability to measure reliably expenses attributable to the asset during development. The entity meeting the aforementioned also needs to demonstrate that the asset will be available for use or sale and expense off any advertising and promotional costs.U.S. GAAP, ASC 340-20,350 and 985-20, dictate that costs for developing, maintaining or restoring intangible assets should be expensed if the expenses are not specifically identifiable, the assets have undefined life or that it is intrinsic under the going concern basis to the business as a whole. However, it allows for capitalization of development expenses related to computer software when the software is for sale and when it is for internal use. As pertains to advertising and promotional costs, the company should have accounting policy choice to expense the s...