Intangible Assets
The IASB is contemplating undertaking an active project on identifiable intangible assets (that is, excluding goodwill) jointly with the FASB. A project proposal was developed and considered by the IASB at its meeting in December 2007. At that time, the Board decided not to add a project on intangible assets to its active agenda. The Board acknowledged the importance of addressing the accounting issues relating to intangible assets, noting concerns with current requirements that lead to inconsistent treatments for particular types of intangible assets depending on how they arise. However, the Board noted that properly addressing the accounting for intangible assets would impose a large demand on the Board’s limited resources. Instead, the Board expressed a desire that the research work begun as part of the development of the agenda proposal should continue until the Board could consider it again for addition to the active agenda. Consideration will now be given to determining the scope and a process for continuing such research work.
Project Scope
Pending the outcome of further discussions about the scope for continuing the research work, there is a range of possible scopes and objectives that could be adopted for an Intangible Assets project. The scope could be one, some or all types of intangible assets. The objective could be recognition, measurement and disclosure or disclosure-only. The project proposal in December 2007 considered different scopes and objectives, including a comprehensive recognition-based project.
In relation to comprehensive recognition, the IASB and FASB decided that the December 2007 proposal should consider the merits of a project that addresses:
- the initial accounting for identifiable intangible assets other than those acquired in a business combination (with a particular focus on, but not limited to, internally generated identifiable intangible assets); and
- the subsequent accounting for all identifiable intangible assets.
Accordingly, the proposal included consideration of a project scope that incorporates initial accounting for intangible assets acquired:
- separately, including those acquired in exchange for a non-monetary asset or assets;
- by way of a government grant; and
- in a group of assets or net assets that is not a business.
Initial accounting for intangible assets acquired in a business combination, and the initial and subsequent accounting for goodwill, were outside the scope of the proposal.
Is this project part of the Memorandum of Understanding?
Yes. Under the Memorandum of Understanding (MoU), the IASB and FASB have undertaken to consider and make a decision about the scope and timing of a potential agenda project on intangible assets by 2008.
The MoU sets out a Roadmap for Convergence between IFRSs and US GAAP 2006-2008.
Click here for more information on the MoU.
Next due process steps
Stage 1: Project proposal
The final proposal was presented to the IASB in December 2007. At that time, the Board decided not to add a project on intangible assets to its active agenda. The Board expressed a desire that the research work begun as part of the development of the agenda proposal should continue until the Board could consider it again for addition to the active agenda. Consideration will now be given to determining the scope and a process for continuing such research work.
Stage 2: Project implementation
If a project becomes active in the future, it would likely be undertaken jointly by the IASB and the FASB. In the interest of obtaining the views of users, preparers and regulators as the project progresses, a Working Group might be established to act in an advisory capacity.
Stage 3: User and preparer views
The December 2007 proposal incorporated an analysis of the views of a range of users, insights from academic studies and implementation experience with IFRS 3 Business Combinations principles. To provide a pragmatic perspective, the proposal suggested that the project team continue consulting with users and preparers of financial reports as part of the project.
Stage 4: Development and publication of a Discussion Paper
The December 2007 proposal suggested that, if a broadly scoped recognition-based project is undertaken, given the significance of the possible changes to IAS 38 Intangible Assets that should be considered, it would not be appropriate to move directly to an exposure draft. Accordingly, the proposal suggested that the project work be focused towards developing a discussion paper setting out preliminary views on the issues prior to issuing an exposure draft.
Estimated project completion
The proposal was discussed at the IASB meeting in December 2007. At that time, the Board decided not to add a project on intangible assets to its active agenda. However, the Board would like the research work that begun with the development of the agenda proposal to continue until the Board can consider it again for addition to the active agenda. The Board will determine the scope and a process for continuing such research work. Until such a determination is made, the timing is uncertain.
Further information
Project contacts:
IASB project team contacts: