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  • Service: Audit, IFRS
  • Date: 5/13/2014

Restricting the use of revenue-based amortisation 

Amendments introducing a new judgemental threshold designed to severely restrict the use of revenue-based amortisation for intangible assets will cause some companies to change their accounting policy.
The amendments introduce a rebuttable presumption that the use of revenue-based amortisation methods for intangible assets is inappropriate. This presumption can be overcome only when revenue and the consumption of the economic benefits of the intangible asset are ‘highly correlated’, or when the intangible asset is expressed as a measure of revenue. While this is not an outright ban, it creates a high hurdle for when these methods may be used for intangible assets.

Restricting the use of revenue-based amortisation (2014/08)

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Amendments designed to severely restrict use of revenue-based amortisation for intangible assets will cause some firms to change their accounting policy.

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