Recognizing Intangible Assets in Intellectual Property (IP) Valuation
Under IFRS guidelines, particularly IAS 38 of the Intangible Assets, Intangible assets should be recognized if they meet specific criteria and their cost can be reliably measured.
Recognition Criteria for Intangible Assets:
- Identifiable:
- Can be separated or identified from the business or other intangible assets.
- Controlled
- The company has the power to obtain future economic benefits and restrict unauthorized use by others.
- Separable
- Can be separated from the business and sold, transferred, licensed, or pledged.
- Cost Measurable:
- The cost of acquiring or developing the IP can be reliably measured.
Not all intangible assets qualify for recognition under IFRS.
