Intangible assets linked to consumers: Acknowledgement and evaluation in the business combination detached from Goodwill

Abstract

The development of International Financial Reporting Standards causes new challenges for accounting as a profession. One of those challenges reefers to business combinations treatment in accounting and the related possibility of recognizing intangible assets detached from goodwill. As it usually represents internally generated intangible assets to which the recognition principle cannot be applied according to IAS 38, the author focuses on conditions under which it can be recognized in financial reports of the acquisitor in business combination, according to IFRS 3. Apart from that, the significant attention is dedicated to the methods for determining the fair value of recognizable intangible assets. As the application of market-based methods, the focus in this paper is on income-based methods and their applicability for consumer-related intangible assets valuation. Limitations in using methods for intangible assets valuation both in stable and crisis conditions are presented at the end of this paper.

Keywords

• intangible assets
• consumers
• evaluation
• business combination
• Goodwill