Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Development and Intangible assets
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- July 14, 2017 at 9:13 am #395894
One of the conditions to be able to recognise Development costs and Intangible assets is to be able to reliably measure the expenses.
What if a company can not reliably measure the costs but
It can reliably measure a minimum cost that was incurred. Is it allowed for this amount to be capitalised or used as the cost for the intangible asset?
Also, what if the company has received an offer recently to sell its business. And the offer has a breakdown which shows the amount the buyers are willing to pay for the customer list of the company.
In this case, can the company recognise the customer list since it now has a fair value even though we dont know its cost.
July 17, 2017 at 9:32 pm #397186Hi,
If it cannot reliably measure the costs then we cannot capitalise the intangible. It is unlikely that we would not be able to measure the costs however as our business should be monitoring what is spent on the development, given that we are a R&D company, hence the situation above is not likely to occur.
On the customer list, given that it hasn’t been recognised then even any evidence of a fair value would not be enough to include it as an intangible.
Thanks
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