Bulletin C-8, what is it about?
Its objective is to define the principles to evaluate, present and disclose the initial and continuous valuation of intangible assets acquired individually or generated internally during the normal operations of the Bank.
Some examples of intangible assets that require the application of professional judgment and a component-level evaluation to determine their inclusion within the parameters of this NIFBdM C-8 They could be the following:
assets intangibles that are stored on a physical medium, such as a magnetic device (in the case of computer software), legal documentation (for licenses or patents), a film or other similar media.
Research and development encompasses, among others, the costs associated with advertising, training, initial expenses and research and development activities, oriented towards the generation of knowledge, for example, the creation of a prototype that may have a physical component, but whose The main value lies in the knowledge it represents, that is, the intangible aspect.
Contracts that grant the Bank rights and licenses related to films, video recordings, manuscripts, patents, copyrights, among others.
Elements to determine what is an intangible asset
The distinctive criteria in the characterization of an intangible asset, whether produced internally or acquired, are the following:
It must lack physical substance.
It must provide reasonably expected future economic benefits.
You must have control over these benefits.
Future economic benefits
Reasonably expected future economic benefits from an intangible asset may be manifested through revenue generated from the sale of products or the provision of services, reductions in costs or other benefits derived from the use of the asset, as defined in the Conceptual Framework.
Acquisition of an intangible asset individually
assets intangibles obtained individually must satisfy the recognition criteria mentioned in the previous paragraph, when an intangible asset is acquired from a third party independently, its cost can usually be evaluated reliably, especially when the consideration for the purchase is made in cash or other monetary assets.
The purchase amount of an intangible asset must include:
The acquisition cost, which includes the purchase price along with non-refundable import duties and taxes, must be deducted from any applicable trade discounts and/or rebates.
Any expense directly related to preparing the asset for its intended use.
Main changes to Bulletin C-8
Specific guidelines and criteria are defined for the accounting of costs associated with research and development, concluding that only costs related to development are eligible for capitalization.
Preoperative costs clearly attributable to research (or in the research stage of a project) should be accounted for as expenses of the period, however, preoperative costs clearly associated with development (or in the development stage of a project), that could qualify as intangible assets, must meet the requirements for recognition as capital, any other pre-operating costs are not eligible for capitalization.
The valuation guidelines are presented in a logical manner, taking as reference the life cycle of the asset, this implies considering the initial recognition and valuation of the intangible asset, as well as the recognition of expenses, subsequent disbursements and the valuation after recognition initial.
A schematic diagram presenting definitions, concepts and examples related to the recognition of certain intangible assets is attached in Appendix B.
Scope of Bulletin C-8
These provisions must be applied to all entities.
This Bulletin does not include:
The management of goodwill in the section addressed by Bulletin B-8, referring to consolidated and combined financial statements, as well as the valuation of permanent investments in shares.
Intangible assets addressed in Bulletin D-3, referring to labor obligations.
Rights and costs related to the exploration, development and extraction of minerals, oil, natural gas and other similar non-renewable resources.