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Intangible Assets

Date recorded:

The Boards discussed the draft agenda proposal for a joint project to develop a new or revised accounting standard on intangible assets. The project is a Memorandum of Understanding item.

The draft agenda proposal was omitted from the observer notes.



The project will address the initial accounting for internally generated intangible assets and the subsequent accounting for all intangible assets. It will not encompass the requirements for the initial accounting for intangible assets acquired separately (in or outside a business combination) and the initial and subsequent accounting for goodwill.

Some IASB and FASB members were concerned about the scoping out of initial accounting for intangible assets acquired separately. One FASB member noted that particularly the initial accounting for intangible assets acquired by way of a government grant has not been adequately addressed in the existing guidance. Others raised the concern that addressing subsequent accounting without looking at initial accounting might lead to inconsistent outcomes.

The staff responded that the reason for scoping out initial accounting for separately acquired intangible assets was that this area is considered to be less problematic whereas there is indication that initial accounting for internally generated intangible assets and the subsequent accounting require immediate attention. In addition, the staff noted that the existing guidance on initial accounting would, of course, be considered.

The Boards agreed to explicitly point this out in the agenda proposal. Finally, there seemed to be a consensus to proceed with the scope as currently outlined in the draft agenda proposal. The Boards will provide offline suggestions for rephrasing the draft agenda proposal.


Assessment against IASB agenda criteria

The potential Intangible Assets project was compared to the IASB agenda criteria in the IASB's Due Process Handbook.

The Boards noted that the project meets all the criteria for an IASB project and that therefore the similar FASB agenda criteria would also be fulfilled.


Project plan and next steps

The IASB staff will revise the draft agenda proposal with a view to reviewing it with the Trustees and SAC in the third and final quarters of 2007 such that the IASB can take a formal Agenda Decision in December 2007.

In addition it was agreed that the revised draft agenda proposal is sent to the Boards for discussion at the next joint meeting in October 2007.

The FASB noted that it will appoint staff shortly to work together with the project team of the IASB.

Given the significance of the possible changes to IAS 38, the Boards tentatively agreed that the preliminary views of the Boards should be set out in a Discussion Paper. The target date for this Discussion Paper is October 2009.

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