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Jun 15, 2023 · However, there may be circumstances when these relationships can be sold or otherwise exchanged without selling the acquired business, thereby meeting the separability criterion. If a noncontractual customer relationship meets the separability criterion, the relationship is recognized as an intangible asset in accordance with ASC 805-20-55-27 .
Jun 15, 2023 · For example, a signed contract is not necessary at the acquisition date to recognize a customer-related intangible asset. However, in applying other accounting literature in US GAAP, an entity may be precluded from recognizing revenue without a signed contract because it may not be able to support existence of a contract.
- Purchased Identifiable Intangibles
- Purchased Unidentifiable Intangibles
- Internally Generated Identifiable Intangibles
There are no significant accounting problems related to purchased identifiable intangible assets that are not also encountered for tangible assets. For example, if a patent is acquired by Sample Company by giving 10,000 shares of its $10 par value common stockknown to be worth S18 per share, the following journal entry is: If a defense of a patent ...
Since goodwill cannot be separated from a firm, it is not possible for a buyer to acquire it without also acquiring the firm. The cost of goodwill equals the excess of the total purchase price over the fair values of the tangible and identifiable intangible assets. Suppose that Sample Company acquires all the assets (except cash) of XYZ Corporation...
Accounting practices for many internally generated identifiable assets, primarily research and development (R&D), are non-uniform.
Oct 31, 2024 · IAS 38 outlines the accounting requirements for intangible assets, which are non-monetary assets which are without physical substance and identifiable (either being separable or arising from contractual or other legal rights).
Separable intangible assets will be items that can be separated from the entity as a whole, meaning that they could be acquired from the entity without having to acquire the entire company.
Separable means that the acquirer is able to parse or divide the asset outside of the target business and potentially sell, rent, license or exchange to another company or entity. A legal right or some form of contractual obligation may give rise to an intangible asset even if it cannot be separately sold or transferred.
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An intangible asset acquired in exchange for a non-monetary asset(s) is measured at fair value unless (i) the exchange transaction lacks commercial substance or (ii) the fair value of neither the asset received
