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1.4.3 The Purpose of Amortisation

The Clarification of Acceptable Methods of Depreciation and Amortization (Amendments
to MFRS 116 and MFRS 138)

⮚ clarifies the possibility of adopting revenue generated by an activity as an amortization

method for intangible assets.
⮚ Amortization of development activities that are capitalized

⮚ MFRS 138 does not prescribe a maximum period of amortization but, in practice, the

amortization period does not exceed five years.

1.5 The Presentation of Intangible Assets in Financial Statements

MFRS 101 requires companies to report:

a. For each type or class of intangible assets
i. useful life or amortization rate

ii. the amortization method

iii. gross amounts carried forward, accumulated amortization, and accumulated
impairment losses at the beginning and end of the period

iv. the adjustment of the amount carried at the beginning and end of the period.
v. the carrying amount of internally generated intangible assets

b. For each asset class that has been revalued:
i. the effective date of the revaluation of the asset

ii. the carrying amount of the revalued intangible asset.
iii. the carrying amount if the asset is valued with the capital valuation cost that has

been adapted.
iv. if there is a surplus of valuation flowing.

v. the method used in estimating the fair market value

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