10 Questions
Which condition makes an intangible asset identifiable?
Being separable and capable of being sold, transferred, licensed, rented, or exchanged
What is a necessary condition for control of an intangible asset?
Legal enforceability of a right
What is an example of an identifiable intangible asset?
A patent that can be licensed to another entity
Under what condition can an intangible asset be considered controllable by the entity?
When the entity has the ability to benefit from the intangible asset
What distinguishes an intangible asset from a tangible asset?
Lack of physical substance
What is a key element of an identifiable intangible asset?
Being separable and capable of being sold, transferred, licensed, or rented
How does control of an intangible asset typically arise?
From having enforceable legal rights over the asset
Under what condition can an intangible asset be considered identifiable?
When it arises from binding arrangements including contractual or other legal rights
What is a characteristic of control over an intangible asset?
Preventing others from benefitting from the asset
What is a distinguishing feature of an intangible asset?
Identifiability and control by the entity
Study Notes
Intangible Asset Identifiability
- An intangible asset is considered identifiable if it meets the definition of an intangible asset and its cost can be reliably measured.
- The asset must be separable, i.e., it can be separated from the entity and sold, transferred, licensed, rented, or exchanged.
Control of Intangible Asset
- A necessary condition for control of an intangible asset is that the entity must have the power to obtain the future economic benefits flowing from the asset and to restrict others' access to those benefits.
Identifiable Intangible Asset Example
- A patent is an example of an identifiable intangible asset.
Controllable Intangible Asset
- An intangible asset can be considered controllable by the entity if it has the power to obtain the future economic benefits flowing from the asset and to restrict others' access to those benefits.
Distinguishing Intangible from Tangible Assets
- Intangible assets are non-physical, whereas tangible assets are physical.
Key Element of Identifiable Intangible Asset
- One key element of an identifiable intangible asset is that it must be separable, i.e., it can be separated from the entity and sold, transferred, licensed, rented, or exchanged.
Control of Intangible Asset
- Control of an intangible asset typically arises when the entity has the power to obtain the future economic benefits flowing from the asset and to restrict others' access to those benefits.
Identifiable Intangible Asset Condition
- An intangible asset can be considered identifiable if it meets the definition of an intangible asset and its cost can be reliably measured.
Characteristic of Control over Intangible Asset
- A characteristic of control over an intangible asset is that the entity has the power to restrict others' access to the benefits flowing from the asset.
Distinguishing Feature of Intangible Asset
- A distinguishing feature of an intangible asset is that it is non-physical, whereas tangible assets are physical.
Test your knowledge of intangible assets with this quiz. Learn about the essential elements of intangible assets, including identifiability and separability. See how much you know about this important aspect of accounting and finance.
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