When should intangible assets acquired through a business combination be recognized?

Intangible assets acquired through a business combination should be recognized at their fair value at the date of acquisition. This approach is consistent with the principles of IFRS 3, which governs the accounting for business combinations.

At the time of a business combination, all identifiable assets and liabilities of the acquired entity must be measured at their fair values, which includes intangible assets such as patents, trademarks, or customer relationships. Recognizing these assets at fair value provides a more accurate reflection of their worth and utility within the acquiring company, aligning with the notion of presenting a true and fair view of the financial statements.

Recognizing intangible assets at fair value also allows for the appropriate measurement of goodwill, which is the excess of the purchase price over the fair value of the identifiable net assets acquired. This is important for financial reporting and providing stakeholders with relevant information about the business’s financial health and the value captured through the acquisition.

Other methods, such as recognizing intangible assets at historical cost or book value, do not provide relevant information in the context of a business combination, as they wouldn't reflect their current economic value at the date of the acquisition. Additionally, waiting to recognize intangible assets until they are sold would not align with the accounting standards, as it would lead to a