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Hi Mr LittleMike
I have some questions about intangible assets
1)If there is no active market for intangible assets we cant revalue them.because Fair value is determined by the active market. Am I right? But IAS 38 requires intangible assets that are separable or arise from contractual or other legal rights that do not have an active market to be valued using fair value measurement techniques (IFRS 13).
2)where do we know that there is no active market for intangibles assets if it is not given in the question?
3)Negative goodwill = Purchase price – Net assets of the company acquired
it will be credited to Profil Loss statement/ Am I right? because we paid less than acquired/Thanks for attention
Stauffer owns a 30-year patent which it acquired two years ago for $8m which is being amortised over its remaining useful life of 16 years from acquisition. The product sold is performing much better than expected. Stauffer’s valuation consultants have valued its current market price at $14m..
in this example we know active market price according the question 1 but it was written that there is no active market for patent“2) where do we know that there is no active market for intangibles assets if it is not given in the question?”
It will be given in the question!
“3) Negative goodwill = Purchase price – (Fair value of the) Net assets of the company acquired – it will be credited to Profil Loss statement/ Am I right? because we paid less than acquired”
Correct
“in this example we know active market price according the question 1 but it was written that there is no active market for patent”
If there is no active market, the examiner will tell you the figure for fair value … if it’s relevant
OK?
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