Under both IFRS and US GAAP, intangible assets lack physical substance, but meet the definition of an asset (i.e., it is expected to benefit the organization for more than a year). Examples include patents, trademarks, copyrights, right-of-ways (easements), and others. Goodwill is also an intangible asset, but can only be recognized upon acquisition of a business. Goodwill is covered extensively in a later chapter.

One significant difference in accounting for intangible assets between the two standards is that under IFRS, certain development costs can be capitalized. Under US GAAP, development costs are always expensed, except in certain circumstances in accounting for a business acquisition. More simply said, in the course of ordinary business, development costs are never capitalized under US GAAP, but can be under IFRS. Research costs are expensed under both IFRS and US GAAP. However, IFRS does specify costs that can never be capitalized. These include training of employees, internally-generated goodwill, creation of images, and others. Internal Web sites can be capitalized under IFRS and, under certain conditions, US GAAP (ASC 985). ASC 985 aligns with fixed-asset accounting. The section provides guidance on stages of production that indicate if costs can be capitalized. IFRS covers software development costs in IAS 38, Intangible Assets. IAS 38 includes accounting for software in the description of all intangible assets. Therefore there is no specific guidance. ...

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