Intangible Assets

Intangible Assets

Both GAAP and the IFRS do not view intangible assets as a financial asset. They consider intangibles as identifiable assets if they are separate as a result of contractual or legal rights. Good will is viewed as a residual that arises from business combinations and is not amortized but tested annually for impairment. The IFRS allows revaluation where GAAP does not. I do not think that intangible assets should be revalued at market simply because it is much easier to follow the historical cost approach. Revaluating assets can be more time consuming and complex.

It is hard to prove market valuations because they are opinions at any given point in time. You can not substantiate an opinion. I do not think that it is reasonable at a later date to say that an asset is worth more or less Often times the person who is making the evaluation of the asset can lacks insight to the reality of the company, asset, and market.

I think that the historical cost approach is a better way of dealing with intangibles because it is the price you pay for the asset based on supply and demand of those assets and entities. I think You are safer with the historical cost approach amortizations of that cost and possibly any adjustments as a result of purchases of any entity when purchased but no adjustments after amortization or any significant impairment value.

Cost approach which is the initial cost of an asset less its accumulated impairments and amortizations

Revaluing can me time consuming and complex.