Any info on the switch from UK accounting standards to International accounting standards?

Question

I'm doing an essay on the change from UK GAAP to IFRS and was wondering if anyone had any info on this regarding intangible assets and goodwill? As far as I can see, both standards are the same and its really annoying me that I cant find any differences. If anyone's got company examples, that'd really help.

Answer 1

IFRS/UK main differences indicator - pls click on the link below

• Goodwill is not amortised under IFRS. Instead, IAS 36 requires an annual impairment review, which should take place at the same time each year (not necessarily the year
end, although if there is a trigger event subsequent to an impairment test being performed on goodwill, then the impairment test must be updated). UK GAAP requires a review of goodwill at the end of the first full year after acquisition, but then only requires such reviews when there has been a trigger event or where goodwill is amortised over more than 20 years (or carried indefinitely without being amortised).
• Where acquired entities are merged with existing operations, FRS 11 requires calculation of the internally generated goodwill of the pre-existing operation to facilitate a more accurate assessment of whether acquired goodwill has been subsequently impaired. There is no similar requirement in IAS 36.

• A wider range of intangible assets are recognised under IFRS, particularly in respect of business combinations (see IFRS 3, page 39).
• Under both IFRS and UK GAAP, an intangible asset is an identifiable non-monetary asset without physical substance. Under IAS 38, an asset is identifiable when it is separable (that is, capable of being sold separate from the entity) or arises from contractual or other legal rights. Under FRS 10, the assets have to be capable of being disposed of separately from the business.
• FRS 10 requires an internally generated intangible to have a readily ascertainable market value before it can be recognised. IAS 38 allows internally generated assets to
be recognised provided they meet criteria similar to those contained within SSAP 13 for development costs. Internally generated brands, mastheads, publishing titles, customer
lists and similar items cannot be recognised, as they cannot be distinguished from the development of the business as a whole.
• IAS 38 does not contain a rebuttable presumption that the useful economic life of an intangible asset is 20 years or less, whereas FRS 10 does, although both standards state that an intangible asset can have an indefinite life and if this is the case they need not be amortised.
• Both IFRS and UK GAAP require annual impairment reviews for intangible assets with an indefinite life. The requirements differ for intangible assets with a finite life. IAS 38 only requires an impairment review if there is an indication of impairment, whereas FRS 10 additionally requires an annual impairment review where the 20-year useful life presumption is rebutted. IAS 38 also requires an annual impairment review for an intangible asset that is not yet ready for use.
• Under IAS 38, research costs must be written off as incurred, whereas development costs should be capitalised where particular criteria are met. This contrasts with SSAP 13 where an entity may choose to capitalise development costs.

Answer 2

The adoption of international accounting standards by many countries makes it easier for international investors to assess the performance of companies in different countries. If companies A, B and C in Norway, Malaysia and England all calculate their profit or loss using international accounting standards it makes it easy for investors in say, USA, to decide in which country they will invest their money.