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IND AS-38, Intangible assets
Financial Reporting
Good afternoon sir! In illu-16, the "in-process research project" does not give FEB when acquired unless further development madei.e.., it is not an intangible asset...even if don't consider as seperate IA as you told we will consider as Goodwill for Goodwill we will consider only Rs 5 lakh which is over and above of FV of tangible assets. So, why can't we account 5 lakhs as Goodwill on acquisition and recognise IA when it met the recognition criteria in buyer books as a new IA??can you please explain me once sir??
Answers (2)
If the asset is identifiable, the acquirer needs to measure the fair value of the asset as per Ind AS 103 (Business combination) While doing so, the company considers the current progress and determines the fair value and recognised as an intangible asset which will be subsequently measured as per Ind AS 38. The logic is even if it is an in process intangible asset - it has some value to it and shoudl be recognised so as to not overstate goodwill. If it cannot be identified, then it goes into goodwill. You can mark this question and revisit once you complete Ind AS 103.
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