Intangible assets of an enterprise may include unique software, research and development results, trade brands and brands, and much more. Client databases , the name of the print media, the cost of training employees and the development of new industries
are not intangible assets - intangible assets.
The concept of intangible assets was introduced for independent accounting of these objects. It is likely that the company will receive future economic benefits from such assets. Their cost can be estimated with a high degree of probability according to IAS 38, subject to the following necessary
conditions:
- future economic benefits from intangible assets can be separated from the benefits that are derived from the business reputation of the company;
- intangible assets of the enterprise are obtained as a result of a certain business transaction;
- an asset can be separated, that is, sold, leased, and distributed benefits.
Obtaining economic benefits from the use of assets is
in net cash inflows, which includes cost savings or
increase in income. Intangible assets of an enterprise can be controlled by prohibiting other companies from accessing this resource, as well as by registering the right to receive economic benefits in the future.
Valuation of intangible assets of an enterprise
Initially, an asset is measured at cost, and it does not matter if it was created independently or acquired from a third-party organization. All subsequent costs are considered expenses if they restore the original standards of use. Economic
benefits that exceed initial standard results from use
assets are capitalization of costs. Under capitalization is meant
increase in the value of an asset and allocation of costs to it.
Intangible assets of an enterprise can be accounted for using the method
initial cost. In this case, accounting is based on cost
less accumulated losses and depreciation. Revalued method
assets based on the amount of revaluation minus accumulated impairment losses.
This method is used in the presence of a dynamic sales market of this type.
assets. By choosing this accounting method, an entity, in accordance with IFRS, should regularly
reevaluate to prevent significant
differences between fair and book value.
Intangible assets produced by an enterprise on its own must go through the stage of research and development. The research phase consists in activities aimed at obtaining new data, searching and evaluating how to use the results. At this stage, there is also a search for new technologies, raw materials, alternative materials, services or systems. Then comes the formulation, evaluation and final selection of acceptable alternatives.
The development phase is the design, construction and testing of prototypes. At this stage, the creation of templates, tools, stamps and forms, which are provided for by new technology.
When creating intangible assets, all research costs
stages are included in expenses. Development costs are accounted for if available
technical ability to complete the creation of an asset for its use
or sales in the future. When creating assets, consider their future
depreciation, which is a systematic allocation of the value of an asset
throughout his useful life.