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Research activities within the business are never able to be treated as an asset they never meet the recognition criteria another set of rules in paragraph indicates that expenditures and resources allocated development activities must need six rules in paragraph to qualify as an iPad or would qualify as an intangible asset let’s have a quick look at paragraph.


this is this year paragraph six rules here one-two. three four five six we have to make every single one of these and in fact, what happens here it is quite an interesting way of going about the standard setting here because by the time.

The company is able to meet all six of these rules www.valuationsvic.com.au right through from a right down to F most of the expenditure that the company outlandish to develop the intangible a certain so in our case to develop the will in fact already be vented accounted for and.

there will be very small amounts of cost left to in fact come into this part f here to measure reliably the expenditure the expenditures already accounted for it already inexpensive one through the accounts okay so where does that leave us in terms of.

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the accounting treatment of IP it leaves using this position firstly all required IP can be treated as an intangible asset and reported on the balance sheet at cost or thinner value if that IP was acquired in a merger and acquisition ina business combination second is extremely unlikely that developed by a company will meet the six rules in power if it’s applied as the regulator’s intended so internally-developed I peed very seldom according to SS b was very seldom up here on the balance sheet so what happens to all of.

their thought resources and costs that a company has out later business have our blades to develop IP well of course of accountants we know it’s still there it’s in the financial statements of the numbers and it will eventually if the IP is valuable to be reflected