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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’. An asset which is acquired or created for use in this way remains a fixed asset even if the purpose for which it is held changes, for example because the company decides to sell an asset or ceases to use it at all.

Therefore, an intangible asset must be:

1. •

   non-financial

2. •

   a fixed asset (ie acquired or created by the company for use on a continuing basis in the course of the company's activities; and 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