Parent X is a first-time adopter with a transition date of 1 January 2019. Parent X acquired Subsidiary P in 2015. Parent X elects not to restate the business combination of Subsidiary P. Subsidiary P owns an internally-generated trademark that is registered in the public domain. The technical expertise required to manufacture a trademarked product is also patented. Parent X recognized a finite-lived intangible asset for the patented trademark at fair value in its consolidated financial statements upon acquisition. How should Parent X measure the trademark upon transition to IFRS?

Parent X measures the patented trademark intangible at fair value as of the date of transition because the asset was recognized under previous GAAP at fair value and the asset must be measured on that same basis at the date of transition.

Parent X is allowed to choose the measurement method for the patented trademark intangible, either at deemed cost or fair value, because IFRS provides this accounting choice, whether or not the acquirer restates the business combination of Subsidiary P.

Parent X measures the patented trademark intangible at deemed cost as of the date of transition (defined as the asset's carrying amount under previous GAAP immediately after the business combination) because IFRS requires a cost-based measurement for such assets at a later date, and the deemed cost shall be the basis for amortization from the date of the business combination.

Parent X does not recognize an intangible for the patented trademark upon adoption of IFRS and shall subsume its value into goodwill because it does not meet the recognition criteria to qualify as an intangible asset if Subsidiary P had applied IFRS in its separate financial statements.