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I have two questions please:
1. how come Intangible assets are defined as non-monetary assets and in the sometime we require that its cost must be measured reliably?
2. How come the identifiability criterion does not apply to goodwill although it is an intangible asset?
Thanks
Intangible assets are not defined as non-monetary assets. Intangible means that it cannot be touched – intangible assets are assets that have no physical existence.
Identifiability does apply to goodwill. We are only allowed to show goodwill in the Statement of financial position if it is been purchased.
Thanks for your reply, but
1. IAS 38 identify intangible assets as follows:
An intangible asset is an identifiable non-monetary asset without physical substance.
2. It also states that an asset is identifiable if it either:
(a) is separable, ie is capable of being separated or divided from the entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, identifiable asset or liability, regardless of whether the entity intends to do so; or
(b) arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from the entity or from other rights and obligations.So, how the identifiable criterion applies to goodwill?
Obviously is an asset has no physical substance it is non-monetary.
I have already answered your second point. If you have paid for goodwill then it has been identified. If you have not paid for it (i.e. if it has been organically ‘grown’ then it is not identifiable and cannot be shown in the financial statements).
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