INTANGIBLES
IFRS Standards US GAAP
Recognition If an item meets the definition of
and an intangible asset, it is
measuremen recognized if:
t  The cost of the asset can be
measured reliably (IAS
38.21) or acquired in a
business combination (IAS
38.33)
 It is probable that the
expected future economic
benefits (IAS 38.17) w ill
flow to the entity (IAS 38.21)
– this criterion is always
considered to be satisfied if the
intangible asset is separately
acquired (IAS 38.25)
The cost of separately acquired
intangible assets (not as part of
a business combination)
includes (IAS 38.27):
 Purchase price, including
import duties and non-
refundable purchase taxes,
after deducting trade
discounts and rebates
 Directly attributable costs of
preparing the asset for its
intended use
Research No intangible asset arising from
and research (or from the research
development phase of an internal project) is
(internally recognized. Expenditure on
generated research (or on the research
intangible phase of an internal project) is
assets) recognized as an expense when
incurred (IAS 38.54).
An intangible asset arising from
development (or from the
development phase of an
internal project) is recognized if
an entity can demonstrate all of
the following (IAS 38.57):
 Technical feasibility of
completing the intangible
asset so it will be available
for use or sale
An intangible asset that is
acquired individually or with a
group of other assets (other than
those acquired in a business
combination) is recognized if it
meets the asset-recognition
criteria in Concepts Statement 5.
It does not have to meet the
contractual-legal criterion or the
separability criterion (ASC 350-
30-25-4).
An intangible asset that is
acquired individually or with a
group of other assets (but not
those acquired in a business
combination) is measured based
on the guidance included in ASC
805-50-15-3 and ASC 805-50-
30-1 through 30-4. The cost of a
group of assets acquired in a
transaction (other than those
acquired in a business
combination) is allocated to the
individual assets based on their
relative fair values and does not
give rise to goodwill (ASC 805-
50-30-3).
Expenditures related to research
and development activities are
expensed as incurred (ASC 730-
10-25-1).
Costs related to computer
software are discussed below .
Costs of internally developing,
maintaining, or restoring
intangible assets (including
goodwill) that are not specifically
identifiable, that have
indeterminate lives, or
that are inherent in a continuing
business and related to an entity
as a whole, are expensed when
incurred
(ASC 350-20-25-3).
  Intention to complete the
intangible asset and use or
sell it
 Ability to use or sell the
intangible asset
 How the intangible asset will
generate probable future
economic benefits
 Availability of adequate
technical, financial, and
other resources to complete
development and to use or
sell the intangible asset
 Ability to reliably measure
the expenditure attributable
to the intangible asset during
its development

Internally generated brands,

mastheads, publishing titles,
customer lists and items similar
in substance are not recognized
as intangible assets (IAS 38.63).
Acquisition IAS 38.33-.37 provides guidance Similar to IFRS Standards, an
as part of a for the initial measurement and intangible asset acquired in a
business recognition of an intangible asset business combination is
combination acquired in a business recognized at fair value
combination: separately from goodwill if it is
 In accordance with IFRS 3, if separable or it arises from
an intangible asset is contractual or other legal rights,
acquired in a business regardless of whether those
combination, the cost of that rights are transferable or
intangible asset is its fair separable (ASC 805-20- 25-10
value at the acquisition date. and ASC Master Glossary,
Both the probability “Identifiable”).
recognition criterion and the
reliable measurement An acquired in-process research
criterion in IAS 38.21 are and development project is
always considered to be recognized as an indefinite-lived
satisfied for intangible intangible asset at its
assets acquired in a acquisition-date fair value
business combination. (ASC 350-30-35-17A, 18B and
 In accordance with IFRS 3 ASC 730-10-15-4).
and IAS 38, an acquirer
recognizes at the acquisition
date, separately from
goodwill, an intangible asset
of the acquiree, irrespective
of whether the asset had
been recognized by the
acquiree before the
business combination. The
in-process research and
development project of the
acquiree must meet the
 definition of an intangible
asset and be identifiable.
Recognition An expenditure on an intangible
of an item is not capitalized unless it
expense forms part of the cost of an
intangible asset that meets the
recognition criteria in IAS 38 or is
acquired in a business
combination and cannot be
recognized as an intangible
asset, in which case it is
recognized as part of
the goodwill (IAS 38.68).
Some expenditures may be
incurred to provide a future
economic benefit, but an
intangible asset or other asset is
not created or acquired that can
be recognized (IAS 38.69). In
these situations, the expenditure
is recognized as an expense
when it is incurred.
Expenditure on an intangible
item that was initially recognized
as an expense is not recognized
as part of the cost of an
intangible asset at a later date
(IAS 38.71)
Measurement An entity chooses either the cost
after model in IAS 38.74 or the
recognition revaluation model in IAS 38.75
as its accounting policy (IAS
38.72).
If the revaluation model is
selected, all the other assets in
that class are also accounted for
using the same model, unless
there is no active market for
those assets (IAS 38.72).
Useful life An entity assesses whether the
and useful life of an intangible asset
amortization is finite or indefinite and, if finite,
the length of, or number of
production or similar units
constituting, that useful life. An
intangible asset is regarded by
the entity as having an indefinite
useful life when, based on an
analysis of all the relevant
factors, there is no foreseeable
limit to the period over which the
Similar to IFRS Standards,
except for certain advertising
expenditures, which are
expensed as incurred (similar to
IFRS Standards) or the first time
the advertising takes place
(unlike IFRS Standards), except
as noted below (ASC 720-35-25-
1).
When an entity assumes an
obligation to reimburse
customers for some of all of the
customers’ advertising costs
(cooperative advertising), the
revenue related to the
transactions creating those
obligations is recognized before
the expenditures are made,
those obligations are accrued
and the related advertising costs
are expensed when the related
revenues are recognized (ASC
720-35-25-1A).
Revaluation is not permitted
(ASC 350-30-35-14).
Similar to IFRS Standards,
intangible assets are amortized
over their useful life unless that
life is determined to be indefinite
(ASC 350-30-35-6 through 35-
7).
Indefinite does not mean infinite
(ASC 350-30-35-4).
Intangible assets subject to
amortization are reviewed for
 asset is expected to generate
net cash inflows for the entity
(IAS 38.88).
The term indefinite does not
mean infinite (IAS 38.91).
Intangible assets are amortized
over their useful life unless that
life is determined to be indefinite
(IAS 38.97).
Impairment An intangible asset with a finite
useful life is amortized and then
tested for impairment in
accordance with IAS 36.7-17. An
entity assesses at the end of
each reporting period whether
there is any indication that an
asset may be impaired. If any
such indication exists, the entity
estimates the recoverable
amount of the asset (IAS 36.9).
An intangible asset with an
indefinite useful life is not
amortized (IAS 38.107).
Irrespective of whether there is
any indication of impairment , an
entity also tests an intangible
asset with an indefinite useful life
for impairment by comparing its
recoverable amount with its
carrying amount annually and
whenever there is an indication
that the intangible asset may be
impaired
(IAS 36.10(a) and IAS 38.108).
Other Computer software is an
matters intangible asset subject to the
guidance in IAS 38 unless it is
an integral part of related
hardware in which case IAS 16
would apply (IAS 38.4).
A web site developed for internal
or external access is an
internally generated intangible
asset that is subject to the
guidance in IAS 38. SIC 32
provides interpretive guidance
on the application of IAS 38 for
web site development costs. For
example, SIC 32 discusses the
impairment in accordance with
ASC 360-10, “Impairment or
Disposal of Long-Lived Assets,”
subsections (ASC 350-30-35-
14).
An intangible asset that is
amortized and other long-lived
assets (a long-lived asset or
asset group) are tested for
impairment using a two-step
process. If the carrying amount
of the asset or group is not
recoverable and it is greater
than its fair value, an impairment
loss is recognized (ASC 360-10-
35-17).
An intangible asset with an
indefinite useful life is not
amortized. It is tested for
impairment annually and, more
frequently, if events or changes
in circumstances indicate that it
is more likely than not that the
asset is impaired (ASC 350-30-
35-18).
Computer software costs may
be capitalized as an intangible
asset in certain specific
circumstances. Separate
guidelines are provided for
internal-use software (ASC 350-
40) and software to be sold,
leased, or marketed (ASC 985-
20).
Similar to IFRS Standards, web
site development costs are
capitalized as an intangible
asset in certain specific
circumstances. Generally, ASC
350-50 discusses the different
stages in the development of a
web site and the accounting for
the costs incurred in those
 different stages in the
development of a web site and
the accounting for the costs
incurred in those stages.
Identifying an An entity assesses at the end of
asset that each reporting period whether
may be there is any indication that an
impaired asset may be Impaired. If any
such indication exists, the entity
estimates the recoverable
amount of the asset (IAS 36.9).
Irrespective of whether there is
any indication of impairment, an
entity (IAS 36.10):
 Tests an intangible asset
with an indefinite useful life
or an intangible asset not yet
available for use for
impairment annually by
comparing its carrying
amount with its recoverable
amount
 Tests goodwill acquired in a
business combination for
impairment annually in
accordance with IAS 36.80-
99
If a cash generating unit includes
goodwill, it is subject to annual
impairment testing and
whenever there is an indication
that the unit may be impaired the
carrying amount of the unit,
including the goodwill, is
compared to the recoverable
amount of the unit. If the
recoverable amount of the unit
exceeds the carrying amount of
the unit, the unit and the goodwill
allocated to that unit shall be
regarded as not impaired. If the
carrying amount of the unit
exceeds the recoverable amount
of the unit, the entity shall
recognize the impairment loss in
accordance with
IAS 36.104 (IAS 36.90).
Impairment Goodwill acquired in a business
testing ‒ combination is allocated to the
goodwill acquirer’s cash-generating units
(CGU) pursuant to the guidance
stages. For example, ASC 350-
50 refers to ASC 350-40 for
internal use software and ASC
985-20 for software to be
marketed externally (ASC 350-
50-25-4).
Similar to IFRS Standards (ASC
360-10-35-21).
Similar to IFRS Standards,
except an intangible asset
not yet available for use is
review ed for impairment when
an indicator of impairment
exists. There are also some
differences in the indicators of
impairment. For example, under
IAS 36 a change in market
interest rates or other market
rates of return is an indicator of
impairment (ASC 350-30-35-18
through 35-20).
Similar to IFRS Standards,
goodwill of a reporting unit is
tested for impairment on an
annual basis and between
annual tests in certain
circumstances. The annual
goodwill impairment test may be
performed any time during the
fiscal year provided the test is
performed at same time every
year. Different reporting units
may be tested for impairment at
different times (ASC 350-20-35-
28 and 35-30).
Goodwill acquired in a business
combination is assigned to one
or more reporting units at the
acquisition date (ASC 350-20-
 in IAS 36.80-.90. Each unit or
group of units that goodwill is
allocated to represent the low est
level within the entity that
goodwill is monitored for internal
management purposes and are
not larger than an operating
segment as defined by IFRS 8.5,
before aggregation (IAS 36.80).
Goodwill is tested for impairment
at the CGU level using a one-
step approach. If the recoverable
amount of the unit is less than
the carrying amount of the unit,
an impairment loss is recognized
and allocated as follows (IAS
36.104):
 First, reduce the carrying
amount of any goodwill
allocated to the CGU
 Then, reduce the carrying
amount of the other assets
of the group on a pro rata
basis of the carrying amount
of each asset in the unit
These reductions in carrying
amounts are treated as
impairment losses on individual
assets and recognized in
accordance with IAS 36.60.
Reversing an An impairment loss for assets
impairment other than goodwill is reversed
loss provided certain conditions are
met (IAS 36.109-.125)
35-41). A reporting unit is an
operating segment or one level
below an operating segment (a
component) (ASC 350-20-35-33
through 35-38).
Unlike IFRS Standards, goodwill
is tested for impairment at the
reporting unit level using a two-
step process (ASC 350-20-35-4
through 35-19). An entity may
first assess qualitative factors,
as described in ASC 350-20-35-
3A through 35-3G, to determine
whether it is necessary to
perform the two-step goodwill
impairment test (ASC 350- 20-
35-3 through 35-3E).
Reversals of impairment losses
are not permitted
(ASC 350-20-35-13, ASC 350-
30-35-20, and ASC 360-10-35-
20).