Similarities

LikeGAAP,underIFRSintangibleassets(1)lackphysicalsubstanceand(2)arenot
financialinstruments.Inaddition,underIFRSanintangibleassetisidentifiable.Tobe
identifiable,anintangibleassetmusteitherbeseparablefromthecompany(canbesold
ortransferred)oritarisesfromacontractualorlegalrightfromwhicheconomicbenefits
willflowtothecompany.Fairvalueisusedasthemeasurementbasisforintangible
assetsunderIFRS,ifitismoreclearlyevident.

Withissuanceofaconvergedstatementonbusinesscombinations(IFRS3andSFASNo.
141Revised),IFRSandGAAPareverysimilarforintangiblesacquiredinabusiness
combination.Thatis,companiesrecognizeanintangibleassetseparatelyfromgoodwillif
theintangiblerepresentscontractualorlegalrightsoriscapableofbeingseparatedor
dividedandsold,transferred,licensed,rented,orexchanged.Inaddition,underboth
GAAPandIFRS,companiesrecognizeacquiredinprocessresearchanddevelopment
(IPR&D)asaseparateintangibleassetifitmeetsthedefinitionofanintangibleassetand
itsfairvaluecanbemeasuredreliably.

AsinGAAP,underIFRSthecostsassociatedwithresearchanddevelopmentare
segregatedintothetwocomponents.Costsintheresearchphasearealwaysexpensed
underbothIFRSandGAAP.

Differences

IFRSpermitsrevaluationonlimitedlifeintangibleassets.Revaluationsarenotpermitted
forgoodwillandotherindefinitelifeintangibleassets.

IFRSpermitssomecapitalizationofinternallygeneratedintangibleassets(e.g.,brand
value)ifitisprobabletherewillbeafuturebenefitandtheamountcanbereliably
measured.GAAPrequiresexpensingofallcostsassociatedwithinternallygenerated
intangibles.

IFRSrequiresanimpairmenttestateachreportingdateforlonglivedassetsand
intangibles,andrecordsanimpairmentiftheassetscarryingamountexceedsits
recoverableamount.Therecoverableamountisthehigheroftheassetsfairvalueless
coststosellanditsvalueinuse.Valueinuseisthefuturecashflowstobederivedfrom
theparticularassets,discountedtopresentvalue.UnderGAAP,impairmentlossis
measuredastheexcessofthecarryingamountovertheassetsfairvalue.

IFRSallowsreversalofimpairmentlosseswhentherehasbeenachangeineconomic
conditionsorintheexpecteduseoflimitedlifeintangibles.(Reversalsofgoodwill
impairmentsarenotallowed.)UnderGAAP,impairmentlossescannotbereversedfor
 assetstobeheldandused;theimpairmentlossresultsinanewcostbasisfortheasset.
IFRSandGAAParesimilarintheaccountingforimpairmentsofassetsheldfordisposal.

UnderIFRS,costsinthedevelopmentphaseofaresearchanddevelopmentprojectare
capitalizedoncetechnologicalfeasibility(referredtoaseconomicviability)is
achieved.