Accounting for Intangible Assets and Reporting ... - Icabr.com

employee wages, registration and legal fees, depreciations of patents and licencesand potential interest paid.1.2 Intangible Assets in US GAAPThe rules of US GAAP are applied by the companies voluntarily, but in some cases theapplication is strictly required by an authority. The Securities Commission (SEC) hasalways required from all players at the US capital market to publish their financialstatements pursuant to US GAAP, only recently also accepting statements based on theIFRS methodology. Like IFRS the US GAAP are not formulated by legislators but byindependent experts. In the case of US GAAP these are represented by the FinancialAccounting Standards Board (FASB), the non-profit non-governmental organisation withindependent in-house source of financing. This basic information has been published byMládek (2005, p. 7 - 9) in his publication Světové účetnictví [Global Accounting].The basic characteristics and examples included in the following paragraph can befound on the web site of FASB, in the document entitled “Statement of FinancialAccounting Standards No. 142, Glossary”, on page 105:Intangible assets are assets (except for financial instruments) without any physicalsubstance.Types of intangible assets include but are not limited to the following:• Intangible assets following from the law – patents, copyright, trademarks, tradenames, broadcasting licences etc.• Intangible assets following from contracts – agreements with employees,manufacturing agreements, consultancy agreements, publicity agreements,distribution agreements, leasing agreements etc.• Intangible assets following from other agreements – licences for use of software,licences for use of technologies, patents, rights to mining, rights to copy booksetc.• Intangible assets following from technology – in-house developed computersoftware, manufacturing processes, technical documentations, drawings,databases• Intangible assets following from business relations – list of customers, suppliers,distributors, records on credit trustworthiness of debtors compiled by creditorsetc.• Goodwill – Decree no 142 defines goodwill also as excess acquisition value of apurchase unit over the value oft eh sum of the acquired asset and the assumedliabilities. There is no negative goodwill pursuant to US GAAP.The aspects relevant for asset pricing pursuant to US GAAP include the asset valuefollowing from the transaction. This value reflects the future economic benefitsfollowing from the asset for the company. The paid out amount is thus recognised inassets.If the asset is not purchase but developed in-house, its recognised value may onlyinclude the legal fees, the court fees, patent licensing, and similar costs necessary forthe asset registration and legal treatment.1.3 Intangible Asset Recognition Pursuant to Czech Accounting StandardsIn the Czech Republic application of the International Financial Reporting Standards iscompulsory for all accounting units issuing securities registered on the regulatedsecurities markets of the EU Member States.The intangible asset area is settled in the Czech accounting legislation in Standard no013 Long-Term Intangible and Tangible Assets. This standard contains definition and