Question

Compare the accounting for intangible assets under GAAP and IFRS. Identify at least one difference in GAAP and IFRS reporting that should be adopted under GAAP in your opinion and explain why.

Answer 1

	US GAAP	IFRS
Guidance	ASC 340-20, 350 and 985-20	IAS 38
Revaluation	Revaluations other than impairments are PROHIBITED	After the initial recognition, the intangibles other than goodwill can be revalued to the fair value. The value in an active market needs to be determined in order to opt for revaluation.
Internally Developed Intangibles	Other than computer software and website development, costs incurred on intangible assets are expensed when incurred. There are no capitalizations.	Internally developed intangible assets are recognized if it is probable that expected future economic benefits attributable to the asset would flow to the company and costs can be measured
Advertising costs	Choice to expense off when incurred or at the time of first advertisement.	Expensed as incurred
Impairment	Reporting unit	Cash generating unit

The difference that should be adopted is the Revaluation. Under the GAAP revaluation is not allowed. Only impairment can be done. However, for reporting correct values and to show the correct present picture Upward revaluation must be allowed. it would help in presenting the correct numbers and the users of the financial statement would be able to make informed decisions.