IAS 38 Intangible Assets

Question 1

What is the Life span of a self- generated intangible asset? (R&D)

Answer 1

Research -> Development -> Utilization

Question 2

Explain the Research Part of the Life Span of an intangible Asset!

Answer 2

Research: Expense

• undeniable premise that no recognizable intangible asset exists
• during research phase all costs in incurred are expensed
• if R&D phases cannot be separated, all expenses fall into the research phase.

Question 3

Explain the Development Part of the Life Span of an intangible Asset!

Answer 3

Development: Recognition

• recognition as an intangible asset, if recognition criteria in 38.57 are met
• costs incurred before fulfilling criteria 38.57 are expensed
• initial recognition is limited with the amount of manufacturing costs

Question 4

Explain the Utilization Part of the Life Span of an intangible Asset!

Answer 4

Utilization: Expense

• intangible assets with a finite useful life are to be amortized each year
• after achieving operational readiness no further differences between self generated and separately acquired intangibles