Lesson: Valuation of Intangible Assets

In this lesson, Nick Palazzolo, CPA, dives into the valuation of intangible assets, explaining that these assets can have either a finite or indefinite life and how they are reported depending on their classification. He discusses the differences in treatment under US GAAP and IFRS, where finite life intangible assets are reported at cost less amortization and impairment, while indefinite life intangibles are reported at cost less impairment only. Nick explains the nuances of the cost and revaluation models under IFRS, including how revaluation gains and losses are processed, emphasizing the need for regular revaluations to ensure carrying values do not materially differ from fair values. He concludes by highlighting how impairments affect revalued intangible assets, ensuring that the intricacies are conceptually understood without getting overwhelmed by the mathematical details.