IAS 38 Intangible Assets

*UK qualifying parents and subsidiaries can take advantage of FRS 101 Reduced Disclosure Framework. Find out more on which entities qualify and the criteria to be met.

Synopsis

An intangible asset is recognised (at cost) only if:

• It meets the definition of an intangible asset (including a requirement to be identifiable), and
• It is probable that the asset will result in a flow of economic benefits to an entity, and
• The cost of the asset can be reliably measured.

Application of these criteria means that the costs associated with most internally generated intangible assets are expensed to profit or loss. An exception is development costs which meet further recognition criteria, as stipulated in the standard.

Subsequent to initial recognition, an entity must choose either the cost or revaluation model for each class of intangible assets, although the revaluation model may only be applied where fair value can be determined by reference to an active market as defined in the standard.

Intangible assets with a finite life must be amortised on a systematic basis over their useful life. Intangible assets with an infinite life should not be amortised. All intangible assets should be assessed for impairment in accordance with IAS 36.

• Read the unaccompanied version of IAS 38

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This unaccompanied version does not include additional content that accompanies the full standard, such as illustrative examples, implementation guidance and bases for conclusions.

Which version of the standard?

Financial Reporting Faculty members who joined the faculty prior to 1 November 2022 have premium access to the consolidated edition of IFRS and amendments through the IASB's IFRS Standards Navigator service. Please log into IFRS Standards Navigator to access electronic versions of the standards through these links.

Please be aware that as part of the changes to ICAEW faculty membership, this service will be withdrawn after 31 December 2022.

Recent amendments

Full access to details of all the amendments is only available to Financial Reporting Faculty members. Find out how to join the faculty.

The following interpretations refer to IAS 38

• IFRIC 12 Service Concession Arrangement

  Accounting guidance for arrangements where a contract is granted for the supply of public services such as roads.

• IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine

  Addresses the accounting treatment of mine waste materials, which are the materials removed by mining entities in order to gain access to mineral ore deposits.

• SIC 29 Disclosure - Service Concession Arrangements

  Prescribes disclosures required by a concession operator and concession provider joined by a service concession arrangement.

• SIC 32 Intangible Assets – Website Costs

  SIC 32 addresses the appropriate accounting treatment for costs at each stage of the development of a website.

UK reduced disclosures – FRS 101

UK qualifying parents and subsidiaries can take advantage of FRS 101 Reduced Disclosure Framework. Find out more on which entities qualify and the criteria to be met.

Amendments to the standard for FRS 101 preparers

There are no amendments to the standard in order to comply with the Companies Act and related Regulations.

Disclosure exemptions for FRS 101 preparers

FRS 101 paragraph 8(f) states that a qualifying entity is exempt from the requirement to disclose a reconciliation of the carrying amount of intangible assets at the beginning and end of the comparative period.

IAS 38 paragraph for which exemption is available: 118(e) (comparative period only). 

This page was last updated 30 August 2022.