## Recognition Criteria (Both must be satisfied)
1. Future Economic Benefits (FEB) will flow to the entity from the asset
2. Cost can be measured reliably
> Same twin criteria as AS 10 for PPE.
---
## Measurement
| Stage | Basis |
|---|---|
| Initial | Cost |
| Subsequent | Cost less Accumulated Amortization |
---
## How the Asset was Acquired → Determines Initial Cost
### (i) Purchased Outright
| + / – | Item |
|---|---|
| + | Purchase price |
| – | Trade discounts and rebates |
| + | Non-refundable taxes and duties |
| + | Directly attributable expenses |
| – | Refundable taxes (excluded — same rule as AS 10) |
> Decommissioning costs and exclusions from cost → same rules as AS 10 PPE.
---
### (ii) Acquired by Way of Exchange
Same as AS 10 — record at fair value of asset given up or asset received, whichever is more clearly evident.
---
### (iii) Acquired in Amalgamation
- All intangible assets taken over by the purchasing company are recorded at Fair Value.
- Any excess of purchase consideration over fair value of net assets taken over = Goodwill (recorded separately).
Formula:
```
Goodwill = Purchase Consideration – Fair Value of Net Assets acquired
```
---
### (iv) Intangible Asset Acquired in Exchange for Shares
Record at:
- Fair value of asset acquired, OR
- Fair value of shares given up
…whichever is more clearly evident.