Amortization of intangible is allowable in IFRS?
Menu
Amortization of intangible is allowable in IFRS?
Replies (20)
Amortization of intangible is allowable in IFRS?
yes
No in the ifrs you need to do the Impairment test.
Goodwill cant be amortised.. It should be tested for impairment and in the first year whatever be amount is there you need to charge to P/L
Thank u Amit.
its ok buddy .. but i sugget u read the standard that will be give more clearity and confidence
Hi Amit,
Can please u suggest books for IFRS.if u have any information post me.
pwc manual reporting is good book
Intangibles other than goodwill are required to be amortised in accordance with paras 95-97 of IAS 38.They will also be required to be tested for impairment. However goodwill cannot be amortised but are reqired to be tested for impairment (IFRS 3).
Narayanan is correct.. One thing u have to know in ifrs.. Ifrs beleives in the substance over form
Amortisation of Intangible Assets :
1. The depreciable amount of intangible assets with finite useful lives is to be allocated over its useful life.
2. Intangible assets with indefinite useful lives are notto be amortized. However, the asset must be tested for impairment annually and whenever there is an indication that it may be impaired. IAS 36 provides guidance on impairment.
3. The determination of an indefinite useful life must be reassessed at each balance sheet date. If the assessment changes, it is to be treated as a change in accounting estimate.
4. Amortization shall commence when the asset is ready for use and shall cease when it is derecognized or is reclassified as held for sale under IFRS
Recently i posted complete theory in the summary .. related to intangible assets. Please go through so every thing will be clear to u.. and in summary rohit answer is abslty fine
It all depends on the life of the intangible asset. Intangible assets which are of permenant nature are not amortised but tested for impairment. For eg Trading rights in Stock exchanges, patents, player rights in sports etc will not be amortised unless thay are for a limited period.
If any assets have useful life they are amortised according to there useful life and in case of infinite life it will be tested for impairment every year
But if any time it will be indication that assets nature is changed and it life will be finite. than assets will be amortised in the remaining life and impact will be effective prospectively not retrospectively
Dear Amit,
The life of intangible asset may be indefinite but not infinite. There is a very thin line of demarkation between the word indefinite and infinite. Here we should use word indefinite.
Recent Threads
- Exports against INR PO payable by Domestic Company
- Which websites are best for government exam prepar
- TDS on maturity payment of LIC of india
- ITR2 Gold ETF short and long term
- Query under faceless assessment
- Purchase of business
- Refund of ITC for advance paid to overseas supplie
- Clubbing query (when gifts given to multiple fami
- Transfer Pricing Audit Upload Form 3CEB - Income T
- Only a Few Pages Indexed by Google Despite Sitemap
Related Threads
CAclubindia
