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IAS 38 Intangible Assets made easy
This document summarizes IAS38 Intangible Assets. It defines an intangible asset as a non-monetary asset without physical substance, including items like software, logos, and customer lists. Internally generated intangible assets from the development stage may be capitalized if they meet six criteria: it is technically feasible, there is intent to complete, it is commercially viable, resources exist to complete it, future economic benefits are probable, and costs can be reliably measured. After initial recognition, intangible assets can be measured either using the cost model with amortization over useful life or the revaluation model using fair value with regular revaluations. Assets with indefinite useful lives are not am
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IAS 38 Intangible Assets made easy
- 1.
- 2. What is anintangible asset?
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- 6. It’s incudes thingslike software code
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- 10. But never staff training Nomatter how smart they are!
- 11. What do youmean by identifiable?
- 12. It can be separated
- 13.
- 14. or licensed, rented,transferred etc. separately.
- 15. It arises from contractual orother legal rights
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- 19. What about internal intangibles? Likethe ones you make yourself?
- 20. Let me tellyou about the two stages…
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- 22.
- 23. It’s the IDEASstage
- 24.
- 25. How do we treatresearch expenditure?
- 26. Expense it inthe period incurred!
- 27.
- 28. But why?? We can’t demonstrateit’ll actually become an intangible asset
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- 31.
- 32. So, the bigquestion…
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- 34. There are 6criteria..
- 35. • It’s technically feasible 1. It’s technically feasible.
- 36. 2. There’s intention tocomplete.
- 37. 3. It’s commerciallyviable.
- 38. 3. It’s commerciallyviable. (that’s the ability to use or sell it)
- 39. • Resources to complete 4. Resources to complete.
- 40. • Resources to complete 4. Resources to complete. (like smart staff and money!)
- 41. 5. Probable future economicbenefits
- 42. 5. Probable future economicbenefits. $ $ $
- 43. 6. Costs canbe measured reliably
- 44. Oh ok, howabout after?
- 45. Choice of twomethods
- 46.
- 47. Calculate the usefullife and residual value
- 48. Depreciate amor8se over useful life
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- 50. Get an expertin to tell you what it’s worth 2. Revaluation Model
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- 52.
- 53. If the useful lifeis indefinite
- 54. If the useful lifeis indefinite Don’t amortise
- 55. Just test itfor impairment
- 56. Just test itfor impairment (at least once a year!)
- 57.
- 58.