IAS 38 - Intangible Assets Flashcards
what is an intangible asset?
an identifiable non-monetary asset without physical substance. it is not held by the entity for sale in the ordinary course of business.
what is amortization?
the systematic allocation of the depreciable amount of an intangible over its useful
what makes an asset identifiable?
- separable and can be sold
- arise from legal/contractual obligations
what if an asset has both tangible and intangible portions?
if significantly intangible = intangible
if intangible is integral part of the tangible = tangible
what requirements must intangibles meet before they can be recognized?
- measurable
- probable
which costs relating to intangibles must be expensed?
- research
- start-up
- training
- advertising
- relocation / restructuring
what do we measure intangibles at?
at cost, and using either:
- cost model
- revaluation model
when are we able to use the reval model?
if the intangible has an active market which exists for it
how do we calculation CA for an intangible?
Cost plus revaluation gains (if relevant) less impairments less amortization
what are the two phases for internally-generated intangible assets?
- research phase
- development phase
what occurs during the research phase?
investigation to obtain new knowledge
every cost is expensed
what occurs during development phase?
applying knowledge towards production before commercial production
when do we capitalize costs?
not during research
maybe during development
what if the two phases are indistinguishable?
treats the expenditure as if it were only incurred during the research phase
what are the conditions for capitalization?
- technically feasible to complete asset
- intends to complete it
- ability to use/sell the asset
- entity has demonstrated how FEBs will be obtained
- resources to complete it
- demonstrated ability to measure reliably
