FRS 102 Section 18 (Intangible Assets other than Goodwill)

A reasonableness check performed in purchase price allocations to verify that the weighted average rate of return across all identified assets (tangible, intangible, and goodwill) is consistent with the overall weighted average cost of capital (WACC) used in the transaction. If WARA materially deviates from WACC, it indicates that the individual asset returns or relative values require adjustment.

A reconciliation tool used in purchase price allocations to verify that the weighted returns implied by the fair values assigned to all acquired assets — tangible and intangible — are consistent with the overall cost of capital for the business. WARA serves as a reasonableness check under IFRS 3 and ASC 805 to ensure that no individual asset class has been materially over- or under-valued.

The economic return generated by a company's intangible asset base, expressed as income attributable to intangible assets divided by their estimated value. Yield on intangible assets provides a measure of how effectively a firm is monetising its intellectual property, brand, customer relationships, and other non-physical resources.

Digital intangible assets recorded and verified on a distributed ledger, including cryptocurrencies, tokenised securities, non-fungible tokens, and smart contracts. The valuation and accounting treatment of blockchain assets remain an evolving area, with significant implications for enterprise balance sheets.

The US GAAP standard governing the subsequent measurement of goodwill and other intangible assets after initial recognition in a business combination. ASC 350 requires annual impairment testing of goodwill and indefinite-lived intangible assets, permits an optional qualitative assessment before performing the quantitative impairment test, and provides guidance on the amortisation of finite-lived intangible assets.

The US GAAP standard governing the recognition, measurement, and impairment of long-lived tangible and certain intangible assets. ASC 360 requires a two-step impairment test: first, a recoverability test comparing undiscounted future cash flows to carrying value; second, if impairment is indicated, measurement of the loss as the excess of carrying value over fair value.

The date of transition is a defined term in IFRS 1, First-time Adoption of International Financial Reporting Standards. It is the beginning of the earliest period for which an entity presents full comparative information under IFRS in its first IFRS financial statements.

Development costs are the expenditure incurred applying research findings to a plan or design for a new or substantially improved product, service, process or system before it enters commercial production or use. Under IAS 38 (IFRS — the default framework for UK groups reporting under adopted IFRS), the standard divides the work into two phases and treats them differently.

What is the IAS 38 revaluation model for intangible assets?

IAS 38 permits revaluation of intangible assets to fair value if an active market exists, but this is rarely used in practice because active markets for most intangible assets do not exist.

What is the difference between tangible and intangible assets?

Tangible assets have physical form: land, buildings, machinery, vehicles and stock. Intangible assets have none: they are identifiable non-monetary assets such as patents, trade marks, software and customer contracts.