Expenditures related to research are expensed as incurred. Internally generated intangibles representing development shall be capitalised if certain conditions are met.
Research costs shall be expensed as incurred (IAS 38.54).
Intangible assets arising from development shall be capitalised if an entity can demonstrate all of the following:
Technical feasibility of completing the intangible asset
Intention to complete the intangible and use or sell it
Ability to use or sell the intangible
How the intangible asset will generate probable future economic benefits
Availability of adequate technical, financial, and other resources to complete development and to use or sell the intangible asset
Ability to reliably measure the expenditure attributable to the intangible asset
The cost of an internally generated intangible asset is the sum of all capitalisable costs incurred from the date the recognition criteria in IAS 38.21, .22, and .57 are first met (IAS 38.65). Reinstatement of previously expensed cost is not allowed (IAS 38.71).
IAS 38.66-.67 provides examples of costs that are and are not capitalisable – for instance, identified inefficiencies, initial operating losses, and training costs are all specifically excluded from capitalisation. Internally generated brands, mastheads, publishing titles, customer lists and items similar in substance are specifically prohibited from being treated as intangible assets (IAS 38.63).
measurement and recognition of intangibles acquired in business combinations:
An identifiable intangible asset acquired in a business combination shall be recognised at fair value. An intangible asset is identifiable if it meets either the separability criterion or the contractual-legal criterion. An in-process...