Page 31 - PowerPoint Presentation

INTANGIBLE ASSETS

Residual Value

• The residual value of an intangible asset with a finite useful
life shall be assumed to be zero unless:

• there is a commitment by a third party to purchase the asset at the
end of its useful life; or

• there is an active market for the asset and:

• the residual value can be determined by reference to that market; and
• it is probable that such a market will exist at the end of the asset's useful
life. (IAS 38.100)
• The depreciable amount of an asset with a finite useful life

is determined after deducting its residual value. A residual

value other than zero implies that an entity expects to
dispose of the intangible asset before the end of its
economic life. (IAS 38.101)

• The residual value is reviewed at least at each financial year-

end. A change in the asset's residual value is accounted for
as a change in an accounting estimate in accordance with

IAS 8.

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