November 15, 2019
PSAB’s September 26-27, 2019 Decision Summary Narrow Scope Amendment Purchased Intangibles
PSAB approved an exposure draft that proposes to remove the exclusion in the conceptual framework prohibiting recognition of purchased intangibles in financial statements. The exposure draft proposes allowing recognition of intangibles purchased through an exchange transaction. Removing the recognition prohibition on purchased intangibles would address a material imbalance in the statements of financial position of many Indigenous governments that finance the purchase of commercial fishing (and other) licenses with debt but cannot currently recognize the licenses as assets. The proposal may also have implications for other public sector entities that purchase intangibles.
Similar to the current situation for purchased Crown lands and purchased natural resources, no guidance on how to account for purchased intangibles is proposed. For now, reference to the asset definition, the general recognition criteria and the GAAP hierarchy is expected. Accounting for these items may be the subject of future PSAB projects.