Day count and Intangible assets: Difference between pages
imported>Charles Cresswell No edit summary |
imported>Doug Williamson (Add examples of recognising the asset.) |
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1. | 1. ''Accounting''. | ||
For accounting purposes, intangible assets are ones that are considered to be long-term assets but are intangible in nature, such as the value of patents and goodwill generated by the business. | |||
2. The | The principles for including this kind of intangible asset in an accounting balance sheet are that the asset must: | ||
1. Have a cost that can be reliably measured; AND | |||
2. Be likely to give rise to future economic benefits. | |||
The accounting term for including such an item in a balance sheet is 'recognising' the asset. | |||
<span style="color:#4B0082">'''''Examples of recognising:'''''</span> | |||
'''1. Orderbook''' | |||
:Not recognised, because it does not have a cost that can be reliably measured. | |||
'''2. Employees''' | |||
:Not normally recognised, because there is not a cost that can be reliably measured. | |||
:Exceptions include star footballers, that have been bought. The transfer fees and other costs paid are recognised as intangible assets. | |||
'''3. Intellectual property''' | |||
:If it has been bought, Yes. | |||
:If it is internally generated, No. | |||
Relevant accounting standards include IAS 38 and Sections 18 and 19 of FRS 102. | |||
2. | |||
More broadly, any non-physical asset, whether it is a short-term asset or a longer-term one. | |||
== See also == | == See also == | ||
* [[ | * [[Amortise]] | ||
* [[Assets]] | |||
* [[Balance sheet]] | |||
* [[Financial reporting]] | |||
* [[Fixed assets]] | |||
* [[Gearing]] | |||
* [[Goodwill]] | |||
* [[IAS 38]] | |||
* [[FRS 102]] | |||
* [[Intellectual property]] | |||
* [[Net worth]] | |||
* [[Patent]] | |||
* [[Recognition]] | |||
* [[Research & development]] | |||
* [[Tangible asset]] | |||
* [[Tangible net worth]] | |||
[[Category:Accounting,_tax_and_regulation]] | |||
[[Category:The_business_context]] | |||
Revision as of 15:52, 20 May 2020
1. Accounting.
For accounting purposes, intangible assets are ones that are considered to be long-term assets but are intangible in nature, such as the value of patents and goodwill generated by the business.
The principles for including this kind of intangible asset in an accounting balance sheet are that the asset must:
1. Have a cost that can be reliably measured; AND
2. Be likely to give rise to future economic benefits.
The accounting term for including such an item in a balance sheet is 'recognising' the asset.
Examples of recognising:
1. Orderbook
- Not recognised, because it does not have a cost that can be reliably measured.
2. Employees
- Not normally recognised, because there is not a cost that can be reliably measured.
- Exceptions include star footballers, that have been bought. The transfer fees and other costs paid are recognised as intangible assets.
3. Intellectual property
- If it has been bought, Yes.
- If it is internally generated, No.
Relevant accounting standards include IAS 38 and Sections 18 and 19 of FRS 102.
2.
More broadly, any non-physical asset, whether it is a short-term asset or a longer-term one.
