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Intangible assets

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Last update 31/08/2019 An intangible asset is an identifiable non-monetary asset without physical substance. Intangible assets can be grouped into three broad categories — rights, relationships and intellectual property: Rights. Leases, distribution agreements, employment contracts, covenants, financing arrangements, supply contracts, licences, certifications, franchises. Relationships. Trained and assembled  workforce, customer and distribution relationships. Intellectual property. Patents; copyrights; trademarks; … Read more

DCF Calculation Value of the business

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Last update 24/12/2019 DCF Calculation Value of the business – This is a simple example to show the workings of a Discounted Cash Flow (DCF) model, which is hopefully also understandable for non-mathematicians. Using cash-flow-based measurement techniques is done using all the following factors: estimates of future cash flows. DCF Calculation Value of the business … Read more

Insurance contracts definitions

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Last update 06/12/2019 Insurance contracts definitions – Here are some of the IFRS 17 Insurance contracts Appendix A definitions. Other not listed here are directly available on IFRS Jargon. Coverage period –  The period during which the entity provides coverage for insured events. This period includes the coverage that relates to all premiums within the … Read more

Customer relationships valuation

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Last update 12/11/2019 Topics hide Introduction References (to familiarise yourself with the subject): What are the inputs to the model? Revenue Revenue growth Turnover/Attrition Terminal value Net margin Inventory write-up Contributory asset charge Charge for trade names Charge for other technology Income tax rate Unit of measurement Partial first year factor Present Value Factor Present … Read more

Insurance contracts acquired in the run-off period

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Last update 17/12/2019 Insurance contracts acquired in the run-off period – An otherwise solvent insurer determines that it wishes to exit from a particular class of insurance contracts, but wishes to continue underwriting in other classes. This could be the result of strategic considerations, lack of profitability in the to be discontinued class, or a … Read more

Customer lists

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Last update 01/12/2019 Customer lists – In a Business Combinations, this is a intangible asset and is therefore recognised separately from goodwill, provided that its fair value can be measured reliably. This customer-related intangible asset does not arise from contractual or other legal rights, but meets the definition of an intangible asset because it is … Read more

Insurance contract

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Last update 06/01/2020 [IFRS 17] Insurance contract – A contract under which one party (the issuer) accepts significant insurance risk from another party (the policyholder) by agreeing to compensate the policyholder if a specified uncertain future event (the insured event) adversely affects the policyholder. Further explanation: The assessment of whether the insurance risk is ‘significant’ … Read more

Customer contracts and the related customer relationships

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Last update 04/12/2019 Customer contracts and the related customer relationships – In a Business Combinations, these are intangible assets and are therefore recognised separately from goodwill, provided that their fair values can be measured reliably. These marketing-related intangible assets meet the definition of an intangible asset because they arise from contractual or other legal rights. … Read more

Individual or collective assessment for impairment

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Last update 28/12/2019 Individual or collective assessment for impairment – An entity should normally identify significant increases in credit risk and recognise lifetime Expected Credit Losses (ECL) before default occurs or the financial asset becomes credit-impaired, either on an individual or collective basis. Individual or collective assessment for impairment It may not be practical to … Read more

Indemnification assets

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Last update 13/12/2019 Indemnification assets – Dictionary meaning of Indemnification is ‘indemnification is the part of an agreement that provides for one party to bear the monetary costs, either directly or by reimbursement, for losses incurred by a second party’. Indemnification of an asset essentially provides kind of guarantee to the other party about the … Read more