## Internally Generated Goodwill
NEVER recognised as an intangible asset.
Why?
1. It is not identifiable (cannot be separated or arise from a legal right)
2. Cost cannot be measured reliably
> Purchased goodwill → Recognised (arises from amalgamation, identifiable, cost known).
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## Other Internally Generated Intangibles
Costs are split into two phases:
### Research Phase
- Entity cannot demonstrate that an intangible asset exists yet.
- All research phase expenses → P&L (expensed immediately).
### Development Phase
- Converts research results into a marketable product/process.
- Begins only when ALL 6 conditions are met simultaneously:
| # | Condition |
|---|---|
| 1 | Technical feasibility of completion |
| 2 | Intention to complete the asset |
| 3 | Ability to use or sell the intangible |
| 4 | Availability of adequate resources (technical, financial, etc.) |
| 5 | How it will generate Future Economic Benefits |
| 6 | Cost can be measured reliably |
> Mnemonic: 2 Completion (1,2) + 2 A's (3,4) + 2 Recognition criteria (5,6)
Once all 6 are met → Capitalise all directly attributable development phase expenses.
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## Internally Generated — CANNOT be Recognised (even if development criteria met)
- Brands
- Customer databases
- Publishing titles and mastheads
> These items cannot be distinguished from the cost of developing the business as a whole.