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  • Topic: Asset, Goodwill, Intangible asset
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IAS 38 Intangible Assets outlines the accounting requirements for intangible assets, which are non-monetary assets which are without physical substance and identifiable (either being separable or arising from contractual or other legal rights). Intangible assets meeting the relevant recognition criteria are initially measured at cost, subsequently measured at cost or using the revaluation model, and amortised on a systematic basis over their useful lives (unless the asset has an indefinite useful life, in which case it is not amortised).

IAS 38 was revised in March 2004 and applies to intangible assets acquired in business combinations occurring on or after 31 March 2004, or otherwise to other intangible assets for annual periods beginning on or after 31 March 2004. History of IAS 38

February 1977 Exposure Draft E9 Accounting for Research and Development Activities July 1978 IAS 9 (1978) Accounting for Research and Development Activities 1 January 1980 Effective date of IAS 9 (1978)

August 1991 Exposure Draft E37 Research and Development Costs December 1993 IAS 9 (1993) Research and Development Costs
1 January 1995 Effective date of IAS 9 (1993)
June 1995 Exposure Draft E50 Intangible Assets
August 1997 E50 was modified and re-exposed as Exposure Draft E59 Intangible Assets September 1998 IAS 38 Intangible Assets
1 July 1999 Effective date of IAS 38 (1998)
31 March 2004 Revisions to IAS 38
1 April 2004 Effective date of March 2004 revisions to IAS 38 22 May 2008 IAS 38 amended for Annual Improvements to IFRSs 2007 about advertising and promotional activities and about the units of production method of amortisation 1 January 2009 Effective date of the May 2008 revisions to IAS 38 16 April 2009 IAS 38 amended for Annual Improvements to IFRSs 2009 about measurement of intangible assets in business combinations 1 July 2009 Effective date of the April 2009 revisions to IAS 38 Related Interpretations

IFRIC 12 Service Concession Arrangements
IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine IAS 16 supersedes SIC 6 Costs of Modifying Existing Software SIC 32 Intangible Assets – Website Costs

Amendments under consideration by the IASB

Rate-regulated activities
IAS 16/IAS 38 — Revenue based depreciation and amortisation Research project — Intangible assets

Summary of IAS 38
Objective

The objective of IAS 38 is to prescribe the accounting treatment for intangible assets that are not dealt with specifically in another IFRS. The Standard requires an entity to recognise an intangible asset if, and only if, certain criteria are met. The Standard also specifies how to measure the carrying amount of intangible assets and requires certain disclosures regarding intangible assets. [IAS 38.1] Scope

IAS 38 applies to all intangible assets other than: [IAS 38.2-3]

financial assets
exploration and evaluation assets (extractive industries) expenditure on the development and extraction of minerals, oil, natural gas, and similar resources intangible assets arising from insurance contracts issued by insurance companies intangible assets covered by another IFRS, such as intangibles held for sale, deferred tax assets, lease assets, assets arising from employee benefits, and goodwill. Goodwill is covered by IFRS 3.

Key definitions

Intangible asset: an identifiable non-monetary asset without physical substance. An asset is a resource that is controlled by the entity as a result of past events (for example, purchase or self-creation) and from which future economic benefits (inflows of cash or other assets) are expected. [IAS 38.8] Thus, the three critical attributes of an intangible asset are:

identifiability
control (power to obtain benefits from the asset)
future economic benefits (such as revenues or reduced future costs)

Identifiability: an intangible asset is identifiable when it: [IAS 38.12]

is...
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