Page 8 - Ebook Financial Accounting 3

ASSETS

Non Current

Current Assets Assets

Property, Plant Investments Intangible

and Equipment Assets

Figure 1.1

1.1. Nature of Intangible Assets
An item is recognized as an intangible asset if it meets:

✔ the definition of intangible assets, and

✔ the recognition criteria.

1.1.1 Definition of intangible Assets

According to MFRS 138, states that an asset meets the identifiability criterion in the definition
of an intangible asset when it:

✔ is separable

✔ 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

Intangible assets can be defined as a non-financial assets without physical material. These
assets can be held or use in the production and supply of goods and services, or for lease to

others or for administration purposes.

Examples of intangible assets:

▪ Patents and copyrights: product or process development that are usually governed by
laws and statutes as to their legal lives.

▪ Franchises and concessions: allow the owners the legal right to operate in certain
industries or to sell certain products or services.

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