Discuss whether intangible assets should be recognised

Reference no: EM132952990

For the last decade it has not been unusual for the premium paid to acquire control of a business to be greater than the fair value of its tangible net assets. This increase in the relative balance sheet proportions of intangible assets has made the accounting practices for them all the more important. During the same period many companies have spent a great deal of money internally developing new intangible assets such as software and brands. IAS 38 'Intangible Assets' was issued in September 1998 and prescribes the accounting treatment for intangible assets.

Required:

In accordance with IAS 38, discuss whether intangible assets should be recognised, and if so how they should be initially recorded and subsequently amortised in the following circumstances:

a) when they are purchased separately from other assets;

b) when they are obtained as part of acquiring the whole of a business; and

c) when they are developed internally.

Reference no: EM132952990

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