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Hi sir, i would like to know how come examiner’s answer treat the license as intangible asset. As intangible asset has to be separable from entity and can be transferred ,sold ,licensed or rented.
However, johan’s case mentioned that it cannot be operate without license and not permitted to sell… So in this case it should not be an ITA as it cannot be separated from business and cannot be sold.
Can you explain to me why examiner treat this way?
Thanks“Separable” is not the same as “capable of being separated”
Separable means clearly identifiable which the licence obviously is.
In fact, just looking at the printed solution, it seems to me that the examiner has fully explained why he feels that the licence meets the definition of an intangible asset!
“An intangible asset meets the identifiability criterion when it is separable or it arises from contractual or other legal rights
‘Intangible Assets’). Additionally intangible assets are recognised where it is probable that the future economic benefits attributable to the asset will flow to the entity and the asset’s cost can be reliably measured. Where intangible assets are acquired separately, the asset’s cost or fair value reflects the estimations of the future economic benefits that are expected to flow to the entity. The licence will, therefore, meet the above criteria for recognition as an intangible asset at cost.”Ermmm…ok! So as long as ITA met those recognition criteria (probable inflow of economic benefit , cost measured reliably, have control, identifiable) it will be recognised right? If it can be separable ,whether it is able to rented , transferable , sold , licensed is not that important anymore?
Please correct me if im wrong..Thank you!
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