Page 12 - Ebook Financial Accounting 3

• Cash • Patents
• Land • Trademarks
• Equipment • Copyrights
• Inventory • Goodwill
• Machinery • Brand Recognition
• Furniture • Internet Domain Names

Tangible Asset Intangible Assets

Figure 1.4

1.3. The initial recognition of Intangible Asset

1.3.1 Recognition criteria of Intangible Assets

✔ it is probable that the expected future economic benefits that are attributable to the asset
will flow to the entity and

✔ the cost of the asset can be measured reliably.

1.3.2 The Internally Generated Intangibles - Goodwill

MFRS 138 prohibits the recognition of internally generated goodwill. Internally

generated brands, mastheads, publishing titles, customer lists and items similar in
substance cannot be recognised as intangible assets.

1.3.3 Research costs and development costs

Definition of research is an activity aimed at obtaining new knowledge. The

search for applications of research findings or another knowledge. The search for
product or process alternatives and the formulation and design of possible new or

improved product or process alternatives. Accounting treatment costs incurred by an
entity during the research phase are recognised as expenses in the period they are

incurred.

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