This is a summary of intangible assets (IAS 38) as it is taught in FRK300. The requirements for this section is to be able to identify, measure and properly disclose intangible assets in accordance with IAS 38. This document summarizes the measurement as well as gives an example of required disclos...
Nature and Definition
o Intangible Assets: an identifiable, non-monetary asset without physical substances
▪ Controlled by entity as a result of past events
▪ From which future economic benefits are expected to flow
o Identifiability: used to distinguish from goodwill
▪ Asset is separable from entity or
▪ Asset arises from contractual obligation
o Non-monetary: not cash or assets receivable in fixed/determinable amounts of cash
o
Recognition
o All costs incurred for intangible assets must be recognized as expenses when incurred
unless costs form part of costs of intangible assets that meet recognition criteria &
capitalized
o Criteria:
▪ Probable that future economic benefits specifically attributable to the asset will
flow to the entity
▪ Costs attributable to asset can be measured reliably
(costs = purchase price + import duty + legal fees + testing cost + taxes etc…)
o Goodwill: internally generated goodwill is not recognized as an intangible asset because
it doesn’t meet the definition or recognition criteria
Internally Generated Asset
o Research Phase: original & planned investigation undertaken with the prospect of
gaining new scientific/technical knowledge
▪ Research costs are always expensed
o Development Phase: application of research and findings/other knowledge through
development of a plan/design aimed at production of new/improved
materials/devices/systems etc…
▪ Additional recognition criteria
Probable future economic benefits
Intention to complete asset
Resources are available to complete asser
Ability to use the asset (or sell)
Technical feasibility of asset
Expenditure related to asset can be reliably measured
If can’t distinguish between research & development phases, then all
expenditure can be considered research costs & written off as incurred
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller thashmiavather. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $2.86. You're not tied to anything after your purchase.
