[IAS 38.70], Intangible assets are initially measured at cost. Internally developed (whether for use or sale): charge to expense until technological feasibility, probable future benefits, intent and ability to use or sell the software, resources to complete the software, and ability to measure cost. [IAS 38.68]. ... IAS 38 (66) (b) states "Costs of employee benefits as defined by IPSAS 25" And IPSAS states Costs of Employee Benefits is The following items must be charged to expense when incurred: For this purpose, 'when incurred' means when the entity receives the related goods or services. If the pattern cannot be determined reliably, amortise by the straight-line method. How to measure intangible assets initially? According to IAS 38 Intangible assets, which of the following statements concerning the accounting treatment of research and development expenditure are true? we introduce what is intangible assets and their attributes, recognition criteria and measurement methods. If an entity cannot distinguish the research phase of an internal project to create an intangible asset from the development phase, the entity treats the expenditure for that project as if it were incurred in the research phase only. [IAS 38.57], Operating system for hardware: include in hardware cost. The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. [IAS 38.63]. 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. The asset should also be assessed for impairment in accordance with IAS 36. IAS 38 requires an entity to recognise an intangible asset, whether purchased or self-created (at cost) if, and only if: [IAS 38.21]. The standard contains a rebuttable presumption that a revenue-based amortisation method for intangible assets is inappropriate. [IAS 38.85], Intangible assets are classified as: [IAS 38.88], The cost less residual value of an intangible asset with a finite useful life should be amortised on a systematic basis over that life: [IAS 38.97], Expected future reductions in selling prices could be indicative of a higher rate of consumption of the future economic benefits embodied in an asset. (1) If certain criteria are met, research expenditure may be recognised as an asset. [IAS 38.78] Examples where they might exist: Under the revaluation model, revaluation increases are recognised in other comprehensive income and accumulated in the "revaluation surplus" within equity except to the extent that they reverse a revaluation decrease previously recognised in profit and loss. According to IAS 38 Intangible assets, which of the following statements about research and development expenditure are correct? patented technology, computer software, databases and trade secrets, trademarks, trade dress, newspaper mastheads, internet domains, video and audiovisual material (e.g. All amendments are effective in the EU for annual periods beginning on or after 1 February 2015, however, earlier application is permitted so EU companies can adopt in accordance with the IASB effective date (1 July 2014). The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. [IAS 38.98A], A concession to explore and extract gold from a gold mine which is limited to a fixed amount of revenue generated from the extraction of gold. Research and development expenditure 126–127 Other information 128 ILLUSTRATIVE EXAMPLES Assessing the useful lives of intangible assets APPENDICES A Intangible Assets—Web Site Costs B References to matters contained in other Indian Accounting Standards 1 Comparison with IAS 38, Intangible Assets [IAS 38.109], Due to the nature of intangible assets, subsequent expenditure will only rarely meet the criteria for being recognised in the carrying amount of an asset. The objective of IAS 38 is to prescribe the accounting treatment for intangible assets that are not dealt with specifically in another IFRS. It replaced IAS 9 Research and Development Costs (issued 1993, replacing an earlier version issued in July 1978). [IAS 38.63], For each class of intangible asset, disclose: [IAS 38.118 and 38.122]. If the revalued intangible has a finite life and is, therefore, being amortised (see below) the revalued amount is amortised. 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