Page 151 - IC26 LIFE INSURANCE FINANCE

If the cost (i.e. fair value) of an intangible asset acquired as part of an amalgamation in

the nature of purchase cannot be measured reliably, that asset is not recognised as a

separate intangible asset but is included in goodwill.

If there is no active market for an intangible asset acquired in an amalgamation in the

nature of purchase, the cost initially recognised for the intangible asset is restricted to an

amount that does not create or increase any capital reserve arising at the date of the

amalgamation.

Acquisition by way of government grant:

Intangible asset granted by government free of cost are recorded at nominal value.

Intangible assets acquired for nominal consideration are recorded at the acquisition cost.

Recognition of Internally Generated Intangible Assets

To assess whether an internally generated intangible asset meets the criteria for recognition,

an enterprise classifies the generation of the asset into Research Phase & Development

Phase.

If an enterprise cannot distinguish the research phase from the development phase of an

internal project to create an intangible asset, the enterprise treats the expenditure on

that project as if it were incurred in the research phase only.

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