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Definition of an IFA

IFAs are intangible assets under GAAP which have a continuing use in the company’s activities. The accounting definition (in FRS 102, s 18) is ‘an identifiable non-monetary asset without physical substance’.

Therefore, an intangible asset must be:

1. •

   non-financial

2. •

   a fixed asset (ie not held or acquired as trading stock)

3. •

   one with no physical substance

4. •

   capable of being identified, ie capable of being sold, licensed, rented or otherwise separated from the business with which it is associated, or otherwise arising from contractual or other legal rights

5. •

   an asset over which the company can exercise a degree of control, ie via a franchise, licence arrangement, patent, etc

The following assets are specifically included in the definition of IFAs for tax purposes:

1. •

   patents

2. •

   trademarks

3. •

   registered designs

4. •

   copyright or design right

5. •

   goodwill