The Governmental Accounting Standards Board (GASB) has issued GASB Statement No. 51, Accounting and Financial Reporting for Intangible Assets. This Statement describes an intangible asset as an asset that lacks physical substance, is nonfinancial in nature, and has an initial useful life extending beyond a single reporting period. Examples of intangible assets include easements, computer software, water rights, timber rights, patents, and trademarks.
The Statement provides guidance regarding how to identify, account for, and report intangible assets, including:
- Requiring that all intangible assets subject to its provisions be classified as capital assets. Accordingly, existing authoritative guidance related to the accounting and financial reporting for capital assets would be applied to these intangible assets, as applicable.
- Providing authoritative guidance that specifically addresses the unique nature of intangible assets, including:
- Requiring that an intangible asset be recognized in the statement of net assets only if it is considered identifiable (i.e., separable);
- Establishing a specified-conditions approach to recognizing intangible assets that are internally generated;
- Providing guidance on recognizing internally generated computer software; and
- Establishing guidance for the amortization of intangible assets.
Governments are required to implement Statement No. 51 for periods beginning after June 15, 2009. Early implementation is encouraged.
|
