SCOPE AND DEFINITION

Question 1

What is the scope of IAS 38 Intangible Assets?

Answer 1

Standard applies to advertising, training, start up research and development activities
‐ Research and development activities resulting in an asset with a physical element (e.g. prototype) accounted for in accordance with IAS 38 since the physical element is secondary to the intangible component (the know how)

Question 2

How are classified assets containing either tangible and intangible elements?

Answer 2

Classification as either tangible asset or intangible asset dependent on which element is more significant.

Question 3

What is out of the scope of IAS 38 Intangible Assets?

Answer 3

• Intangible assets dealt with in other standards
  ‐Inventory, construction contracts
  ‐Deferred tax assets (DTAs)
  ‐Employee benefits
  ‐Leases
  ‐Goodwill acquired in business combination
  ‐Deferred acquisition costs
  ‐Non-current intangible assets classified as held for sale
• Financial assets (IFRS 9)
• Exploration & Evaluation assets (IFRS 6)
• Development and extraction of mineral oils, natural gas and similar non regenerative resources
• Corporate identity and IP

Question 4

Definition of Intangible Assets

Answer 4

The asset must be identifiable, controlled by the enity and without physical substance

Question 5

What “identifiability” means? When an asset is identifiable?

Answer 5

‘Identifiability ’ distinguishes other intangible assets from goodwill

An asset is identifiable if it is either:
‐ separable , i.e. Is capable of being separated or divided from the entity and sold, transferred, licensed, rented or exchanged, either
individually or together with a related contract, (identifiable asset or liability regardless of whether the entity intends to do so); or
‐ Arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from the entity or from other rights and obligations.

Question 6

When an entity has control of an asset?

Answer 6

An entity has control of an asset if:
‐ It has the power to obtain future economic benefits flowing from the underlying resource, and
‐ It is able to restrict access of the economic benefits to others

Question 7

What means that the asset is without physical substance?

Answer 7

It means that the intangible element contained in the asset must be more significant that the tangible element.