Septiembre 2011

Investment property

Investment property

Definition

Investment property is non-current property assets held to earn rentals or for capital appreciation or both, rather than for:

• 
  Use in the production or supply of goods or services or for administrative purposes; or
  

• 
  Sale in the ordinary course of business.
  

Measurement

The same measurement bases are applied as those for property, plant and equipment.

Intangible assets

The same rules contained in the standard on property, plant and equipment apply, without prejudice to the following:

Recognition

Order for an intangible asset to be recognised, in addition to the definition of an asset and the recognition criteria contained in the conceptual framework, it is necessary that it meets the requirement of identifiability, which entails that it fulfils either of the following two conditions:

• 
  It is separable (it may be sold, transferred, given up for use, rented or exchanged).
  

• 
  It arises from contractual or other legal rights.
  

Start-up costs, customer lists, trademarks or other similar items that have been generated internally are not recognised as intangible assets.

Subsequent measurement

In general, intangible assets are amortised on the basis of their useful lives, unless they have an indefinite useful life, in which case they are not amortised. However, they must be tested for possible impairment at least once a year, and the continuance of the factors that support an indefinite useful life assessment must be reviewed.

Particular rules on intangible assets

Research and development:
Research expenditure is an expense in the year in which it is incurred, although it may be capitalised to intangible assets from the time when the following two conditions are met:

• 
  It is specifically itemised by project and the related costs are clearly identified so that they can be allocated over time.
  

• 
  There are sound reasons to foresee the technical and economic success of the project.
  

If development expenditure meets the foregoing requirements it is capitalised to assets.

• 
  Research expenditure must be amortised within a maximum period of five years.
  

• 
  Development expenditure must be amortised over its useful life, which in principle, unless there is evidence to the contrary, does not exceed five years.
  

In both cases if at any time there are reasonable doubts as to the technical success or economic profitability of the project, the

amounts capitalised must be recognised directly in profit or loss for the year.

Intellectual property:

Development expenditure capitalised when the corresponding patent or similar item is obtained, including the cost of registering and formalising intellectual property. Intellectual property is amortised and impairment losses are recognised thereon in accordance with the general rules provided for other intangible assets.

Goodwill:

Goodwill is only recognised when it arises in an acquisition for valuable consideration in the context of a business combination.

It must be allocated to the corresponding cash-generating unit or units from the acquisition date.

Goodwill is not amortised, but rather at least once a year it is reviewed for impairment and, where appropriate, impairment losses are recognised.

Impairment losses on goodwill may not be reversed.

Leasehold assignment rights:

Leasehold assignment rights must arise from a transaction for valuable consideration. They are amortised and impairment losses are recognised thereon in accordance with the general rules that govern intangible assets.

Computer software:

Both computer programs acquired from third parties and software developed in-house may be capitalised, applying the same recognition and amortisation criteria as for development expenditure.

Other intangible assets (administrative concessions, commercial rights, intellectual property or licences):

These are amortised and impairment losses are recognised thereon in accordance with the general rules that govern intangible assets.