Accounting of Intangible Assets under FVA

Abstract

The review paper endeavours to bring out the fair value measurements with respect to the intangible assets, which are evaluated and accounted for the business combination under the Level 3 of fair value hierarchy. The faithful representation of intangibles in the financial statements can only be achieved by additional disclosure requirements under the fair value mechanism. The post amelioration of the fair value measurements by the two Boards, more empirical studies should to be carried out to determine the value relevance of intangibles. The paper presents an extant of analysis of the methods of valuation of intangible assets, the background why fair value is overpowering the historical method of accounting. The challenges and controversial issues which both the Boards need to foresee while structuring the fair value measurement pronouncement.

Key words: Fair value accounting, Relevance, Reliability, Intangible assets, Disclosure.