WWW.ABSTRACT.DISLIB.INFO
FREE ELECTRONIC LIBRARY - Abstracts, online materials
 
<< HOME
CONTACTS



Pages:     | 1 |   ...   | 5 | 6 || 8 | 9 |   ...   | 20 |

«Business combinations and changes in ownership interests A guide to the revised IFRS 3 and IAS 27 Audit.Tax.Consulting.Financial Advisory. Contacts ...»

-- [ Page 7 ] --

2.2B Nuclear power plant subject to a licence [IFRS 3(2008).B32(b)] An acquiree owns and operates a nuclear power plant. The licence to operate that power plant is an intangible asset that meets the contractual-legal criterion for recognition separately from goodwill, even if the acquirer cannot sell or transfer it separately from the acquired power plant. An acquirer may recognise the fair value of the operating licence and the fair value of the power plant as a single asset for financial reporting purposes if the useful lives of those assets are similar.

Example 8.4.

2.2C Technology patent [IFRS 3(2008).B32(c)] An acquiree owns a technology patent. It has licensed that patent to others for their exclusive use outside the domestic market, receiving a specified percentage of future foreign revenue in exchange. Both the technology patent and the related licence agreement meet the contractuallegal criterion for recognition separately from goodwill even if selling or exchanging the patent and the related licence agreement separately from one another would not be practical.

The recognition and measurement of intangible assets has always been one of the difficult areas of IFRS 3 to apply in practice. Valuation practices have developed over time and their interpretation and implementation remains varied.

8.4.2.3 Examples of identifiable intangible assets The following examples of identifiable intangible assets are taken from the Illustrative Examples accompanying IFRS 3(2008), and are not intended to be all-inclusive. They include examples under 5 headings: marketing-related, customer-related, artistic-related, contract-based, and technologybased intangible assets. The text indicates whether examples are contractual or non-contractual.

Intangible assets identified as having a contractual basis are those that arise from contractual or other legal rights. Those designated as having a non-contractual basis do not arise from contractual or other legal rights but are separable. Intangible assets identified as having a contractual basis might also be separable but separability is not a necessary condition for an asset to meet the contractual-legal criterion. [IFRS 3(2008).IE17]

–  –  –

Example 8.4.

2.3A Marketing-related intangible assets [IFRS 3(2008).IE18-IE22] Marketing-related intangible assets are used primarily in the marketing or promotion of

products or services. Examples of marketing-related intangible assets are:

–  –  –

Trademarks, trade names, service marks, collective marks and certification marks Trademarks are words, names, symbols or other devices used in trade to indicate the source of a product and to distinguish it from the products of others. A service mark identifies and distinguishes the source of a service rather than a product. Collective marks identify the goods or services of members of a group. Certification marks certify the geographical origin or other characteristics of a good or service.

Trademarks, trade names, service marks, collective marks and certification marks may be protected legally through registration with governmental agencies, continuous use in commerce or by other means. If it is protected legally through registration or other means, a trademark or other mark acquired in a business combination is an intangible asset that meets the contractual-legal criterion. Otherwise, a trademark or other mark acquired in a business combination can be recognised separately from goodwill if the separability criterion is met, which normally it would be.

The terms brand and brand name, often used as synonyms for trademarks and other marks, are general marketing terms that typically refer to a group of complementary assets such as a trademark (or service mark) and its related trade name, formulas, recipes and technological expertise. IFRS 3 does not preclude an entity from recognising, as a single asset separately from goodwill, a group of complementary intangible assets commonly referred to as a brand if the assets that make up that group have similar useful lives.

Internet domain names

An Internet domain name is a unique alphanumeric name that is used to identify a particular numeric Internet address. Registration of a domain name creates an association between that name and a designated computer on the Internet for the period of the registration. Those registrations are renewable. A registered domain name acquired in a business combination meets the contractual-legal criterion.

Assets, liabilities and non-controlling interests Example 8.4.

2.3B Customer-related intangible assets [IFRS 3(2008).IE23-IE31]

Examples of customer-related intangible assets are:





–  –  –

A customer list consists of information about customers, such as their names and contact information. A customer list also may be in the form of a database that includes other information about the customers, such as their order histories and demographic information.

A customer list does not usually arise from contractual or other legal rights. However, customer lists are often leased or exchanged. Therefore, a customer list acquired in a business combination normally meets the separability criterion.

Order or production backlog An order or production backlog arises from contracts such as purchase or sales orders. An order or production backlog acquired in a business combination meets the contractual-legal criterion even if the purchase or sales orders can be cancelled.

Customer contracts and the related customer relationships If an entity establishes relationships with its customers through contracts, those customer relationships arise from contractual rights. Therefore, customer contracts and the related customer relationships acquired in a business combination meet the contractual-legal criterion, even if confidentiality or other contractual terms prohibit the sale or transfer of a contract separately from the acquiree.

A customer contract and the related customer relationship may represent two distinct intangible assets. Both the useful lives and the pattern in which the economic benefits of the two assets are consumed may differ.

A customer relationship exists between an entity and its customer if (a) the entity has information about the customer and has regular contact with the customer and (b) the customer has the ability to make direct contact with the entity. Customer relationships meet the contractual-legal criterion if an entity has a practice of establishing contracts with its customers, regardless of whether a contract exists at the acquisition date. Customer relationships may also arise through means other than contracts, such as through regular contact by sales or service representatives.

Assets, liabilities and non-controlling interests As noted [above], an order or a production backlog arises from contracts such as purchase or sales orders and is therefore considered a contractual right. Consequently, if an entity has relationships with its customers through these types of contracts, the customer relationships also arise from contractual rights and therefore meet the contractual-legal criterion.

Examples The following examples illustrate the recognition of customer contract and customer relationship intangible assets acquired in a business combination.

(a) Acquirer Company (AC) acquires Target Company (TC) in a business combination on 31 December 20X5. TC has a five-year agreement to supply goods to Customer. Both TC and AC believe that Customer will renew the agreement at the end of the current contract.

The agreement is not separable.

The agreement, whether cancellable or not, meets the contractual-legal criterion.

Additionally, because TC establishes its relationship with Customer through a contract, not only the agreement itself but also TC’s customer relationship with Customer meet the contractual-legal criterion.

(b) AC acquires TC in a business combination on 31 December 20X5. TC manufactures goods in two distinct lines of business: sporting goods and electronics. Customer purchases both sporting goods and electronics from TC. TC has a contract with Customer to be its exclusive provider of sporting goods but has no contract for the supply of electronics to Customer.

Both TC and AC believe that only one overall customer relationship exists between TC and Customer.

The contract to be Customer’s exclusive supplier of sporting goods, whether cancellable or not, meets the contractual-legal criterion. Additionally, because TC establishes its relationship with Customer through a contract, the customer relationship with Customer meets the contractual-legal criterion. Because TC has only one customer relationship with Customer, the fair value of that relationship incorporates assumptions about TC’s relationship with Customer related to both sporting goods and electronics. However, if AC determines that the customer relationships with Customer for sporting goods and for electronics are separate from each other, AC would assess whether the customer relationship for electronics meets the separability criterion for identification as an intangible asset.

(c) AC acquires TC in a business combination on 31 December 20X5. TC does business with its customers solely through purchase and sales orders. At 31 December 20X5, TC has a backlog of customer purchase orders from 60 per cent of its customers, all of whom are recurring customers. The other 40 per cent of TC’s customers are also recurring customers.

However, as of 31 December 20X5, TC has no open purchase orders or other contracts with those customers.

Assets, liabilities and non-controlling interests

Regardless of whether they are cancellable or not, the purchase orders from 60 per cent of TC’s customers meet the contractual-legal criterion. Additionally, because TC has established its relationship with 60 per cent of its customers through contracts, not only the purchase orders but also TC’s customer relationships meet the contractual-legal criterion.

Because TC has a practice of establishing contracts with the remaining 40 per cent of its customers, its relationship with those customers also arises through contractual rights and therefore meets the contractual-legal criterion even though TC does not have contracts with those customers at 31 December 20X5.

(d) AC acquires TC, an insurer, in a business combination on 31 December 20X5. TC has a portfolio of one-year motor insurance contracts that are cancellable by policyholders.

Because TC establishes its relationships with policyholders through insurance contracts, the customer relationship with policyholders meets the contractual-legal criterion. IAS 36 Impairment of Assets and IAS 38 Intangible Assets apply to the customer relationship intangible asset.

Non-contractual customer relationships A customer relationship acquired in a business combination that does not arise from a contract may nevertheless be identifiable because the relationship is separable. Exchange transactions for the same asset or a similar asset that indicate that other entities have sold or otherwise transferred a particular type of non-contractual customer relationship would provide evidence that the relationship is separable.

Example 8.4.

2.3C Artistic-related intangible assets [IFRS 3(2008).IE32-IE33]

Examples of artistic-related intangible assets are:

–  –  –

Artistic-related assets acquired in a business combination are identifiable if they arise from contractual or legal rights such as those provided by copyright. The holder can transfer a copyright, either in whole through an assignment or in part through a licensing agreement.

An acquirer is not precluded from recognising a copyright intangible asset and any related assignments or licence agreements as a single asset, provided they have similar useful lives.

Example 8.4.

2.3D Contract-based intangible assets [IFRS 3(2008).IE34-IE38] Contract-based intangible assets represent the value of rights that arise from contractual arrangements. Customer contracts are one type of contract-based intangible asset. If the terms of a contract give rise to a liability (for example, if the terms of an operating lease or customer contract are unfavourable relative to market terms), the acquirer recognises it as a liability assumed in the business combination.

Examples of contract-based intangible assets are:

–  –  –

Use rights, such as drilling, water, air, timber cutting and route authorities Contractual Assets, liabilities and non-controlling interests Servicing contracts, such as mortgage servicing contracts Contracts to service financial assets are one type of contract-based intangible asset. Although servicing is inherent in all financial assets, it becomes a distinct asset (or liability) by one of the

following:

(a) when contractually separated from the underlying financial asset by sale or securitisation of the assets with servicing retained;

(b) through the separate purchase and assumption of the servicing.

If mortgage loans, credit card receivables or other financial assets are acquired in a business combination with servicing retained, the inherent servicing rights are not a separate intangible asset because the fair value of those servicing rights is included in the measurement of the fair value of the acquired financial asset.



Pages:     | 1 |   ...   | 5 | 6 || 8 | 9 |   ...   | 20 |


Similar works:

«Microcredit in Bangladesh : Achievements and Challenges Dr. Salehuddin Ahmed Managing Driector Palli Karma-Sahayak Foundation (PKSF) Bangladesh.1. Introduction In recent years, microcredit, in its wider dimension known as microfinance, has become a much favoured intervention for poverty alleviation in the developing countries and least development countries. There is scarcely a poor country and development oriented donor agency (multilateral, bilateral and private) not involved in the promotion...»

«Department of Public Safety Parking Services: Policies & Procedures Parking Services Office 690 S. Church St., West Chester PA 19383 610-436-3345 Issue Date: July 15, 2015 1|Page Contents Accessible Parking Accessible Parking Spaces WCU Temporary Disability Pass Accidents, Damages, Disabled Vehicles Involved in an accident? Damaged or Disabled Vehicles Allow Extra Time for Parking Parking Ticket Appeals Level 1 Appeal Level 2 Appeal Borough Parking Options Parking Meters Parking Structures...»

«The Under Ground Theatre Our volunteer-run venue has something for everyone this season at affordable prices or free such as Two original dramas The start of two complete Beethoven series Eastbourne Book Fes val Musicians making headline debuts Top class Jazz acts Four top class tributes Christmas Dance night A season of great films, best seen in company WHY NOT BECOME A MEMBER? AN APPLICATION FORM IS TOWARDS THE END OF THIS BROCHURE Tone up, get fit and have fun, ‘Strictly’ style. Every...»

«The Wallace Stevens Journal Special Issue: Approaching the Millennium Stevens and Apocalyptic Language A Publication of The Wallace Stevens Society, Inc. Volume 23 Number 2 Fall 1999 The Wallace Stevens Journal Volume 23 Number 2 Fall 1999 Special Issue: Approaching the Millennium Stevens and Apocalyptic Language Edited by Eleanor Cook Contents Wallace Stevens’ “Puella Parvula” and the “Haunt of Prophecy” —Malcolm Woodland 99 “Cloudless the morning. It is he”: The Return of the...»

«Table of Contents 1 Introduction 1 2 Statement of the Problems 1 2.1 Why Social Performance Measurement? 1 2.2 The Importance of SPM for Nepal 3 3 Objectives of the Paper 4 4 Methodology of the Investigation 4 4.1 Social Performance Assessment Process 4 4.2 Social Performance Assessment Tools 5 4.2.1 CERISE Social Performance Indicators (SPI) Initiative 5 4.2.2 SPA Tool 6 4.2.3 ACCION SOCIAL Tool 6 4.2.4 CGAP–Grameen–Ford Progress out of Poverty Index (PPI) 7 4.2.5 FINCA’s Client...»

«EQUATORIAL GUINEA Continued institutional and key human rights concerns in Equatorial Guinea Amnesty International Submission to the UN Universal Periodic Review, May 2014 CONTENTS Introduction Follow up to the previous review Normative and institutional framework in Equatorial Guinea Promotion and protection of human rights on the ground The death penalty Unfair trials Torture and other ill-treatment Unlawful killings Arbitrary arrest and detention of political opponents and their families and...»

«Chapter 17 Physiological reactions to Climatic Conditions Malcolm J. McPherson CHAPTER 17. PHYSIOLOGICAL REACTIONS TO CLIMATIC CONDITIONS 17.1 INTRODUCTION 17.2 THERMOREGULATION OF THE HUMAN BODY 17.3 PHYSIOLOGICAL HEAT TRANSFER 17.3.1 The metabolic heat balance 17.3.2 Respiratory heat transfer 17.3.3 Convective heat transfer 17.3.3.1 The convective heat transfer equation 17.3.3.2 Clothing factors 17.3.3.3 Convective heat transfer coefficient, hc 17.3.3.4 Mean skin temperature, tsk 17.3.4...»

«Financial Inclusion in Australia and the Potential of Social Networks Justin W. Iu School of Sociology, College of Arts and Social Sciences The Australian National University Abstract The issue of financial exclusion is becoming increasingly prevalent in Australia. The inability to access appropriate and affordable financial products and services from mainstream financial institutions can substantially inhibit an individual‟s capacity to participate in modern society. While governments have...»

«Appendix A Financial system issues in the context of Wallis Professor Rodney Maddock March 2014 This report has been commissioned by the Australian Bankers’ Association to inform the industry’s consideration of issues. The report reflects the views of its authors only. The report and points made within the report do not necessarily reflect the views of the ABA or any individual bank. Financial system issues in the context of Wallis Professor Rodney Maddock Monash University & Victoria...»

«SIR JOHN SOANE'S MUSEUM Registered Charity No. 313609 THE ANNUAL REPORT AND ACCOUNTS FOR THE YEAR 1 APRIL 2015 TO 31 MARCH 2016 HC 541 SIR JOHN SOANE'S MUSEUM Registered Charity No. 313609 THE ANNUAL REPORT FOR THE YEAR 1 APRIL 2015 TO 31 MARCH 2016 PRESENTED TO PARLIAMENT PURSUANT TO ARTICLE 3(3) OF THE GOVERNMENT RESOURCES AND ACCOUNTS ACT 2000 (AUDIT OF PUBLIC BODIES) ORDER 2003 (SI 2003/1326) ORDERED BY THE HOUSE OF COMMONS TO BE PRINTED 18 JULY 2016 HC 541 © Sir John Soane’s Museum...»

«S O C I A L F I C T I O N S S E R I E S Zero Tolerance and Other Plays Disrupting Xenophobia, Racism and Homophobia in School Tara Goldstein ZERO TOLERANCE AND OTHER PLAYS Social Fictions Series Series Editor Patricia Leavy USA The Social Fictions series emerges out of the arts-based research movement. The series includes full-length fiction books that are informed by social research but written in a literary/artistic form (novels, plays, and short story collections). Believing there is much to...»

«02. ON PARTING FARE WELL Friday, April 13, 1945 The last night before my departure I spent at my parents' house in the centre of the town of Osijek. The night had been relatively quiet though one could hear long and heavy cannonade from the German bridgehead on the other side of the river Drava. This bridgehead had been built about three months ago some 40 kilometres west of Osijek at Donji Miholjac. By now, we were quite used to this noise and the almost standard procedure: Russian aircraft...»





 
<<  HOME   |    CONTACTS
2017 www.abstract.dislib.info - Abstracts, online materials

Materials of this site are available for review, all rights belong to their respective owners.
If you do not agree with the fact that your material is placed on this site, please, email us, we will within 1-2 business days delete him.