Recognition and general valuation of intangible assets

Author:PhD. Student Monica JULEAN, PhD Student Elena Emilia IORDACHE

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Keywords:Intangible assets, Fair value, Income method, Transactional method, Options method

Abstract:
Recently, investments in intangible assets became more and more important because of the expenses more and more significant they require, for conceiving, creating organizing or researching new opportunities. \r\nAs a consequence, companies must pay a greater attention to these assets and to develop appropriate techniques and procedures to measure and valuate these assets.\r\nRecognition and valuation of intangible assets is done according to national legislation in force meaning the Order of public finances minster no 1752/2005 with further changes and completions and for those entities who apply the International Financial Reporting Standards, the provisions of IAS 38 „Intangible assets” and IFRS 3 „Business Combinations”.\r\nAccording to IFRS principles new valuation methods have been developed to valuate intangible assets at fair value. These methods take into account the immateriality of these assets and that there is no market to negotiate them and information is not always available. \r\nMethods are based on market, cost, future cash flows or mathematical models. According to the exact situation of the company as well as the element which is valuated management chooses the most appropriate method.

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