Ias 38 Intangible Asset

Question 1

Intangible asset

Answer 1

Identifiable

Non monetary

Asset

Without physical substance

Question 2

Include

Answer 2

Gw acquired
Brand
Patent
Software
License
Copyright motion picture films
Customer list
Mortgage servicing rights
Import quotas
Franchise
Customer and supplier relationships 
Marketing right

Question 3

Recognition criteria

Answer 3

All of the following criteria are fulfilled

1. Asset is identifiable
2. Asset is controlled by the entity
3. Asset will generate future economic benefits for he entity
4. cost of the asset can be measured reliably

Question 4

Asset is identifiable if

Answer 4

It is separable

Arises from contractual or other legal rights regardless if those rights are transferable or separable from the entity or other rights and obligations.

Question 5

Initial recognition

Answer 5

At cost

Question 6

Subsequent recognition

Answer 6

Cost or revaluation model

Question 7

Cost model

Answer 7

Cost less amortization and impairment

Question 8

Revaluation model

Answer 8

Measure asset at fv less amortization and impairment

Fv can only be determined by reference to active market

Revaluation must be done with sufficient regularity ( that amount does not differ significantly from actual fv at reporting date

Question 9

Active market

Answer 9

An active market is one where products are homogenous, there are willing buyers and sellers to be found at all times and prices are available to the public
They are rare for intangible assets
May exist for milk quotas , stock exchange seats

Unlikely for brands ,newspaper masthead ‘publishing rights patent trademarks

Question 10

Finite useful life

Answer 10

Must be amortised on a systematic basis over life of the asset

Question 11

Indefinite useful life

Answer 11

When there is. O foreseeable limit to the period over which the asset is expected to generate net cash inflows

Not amortised

Annual impairment review

Question 12

Research

Answer 12

Original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding

Question 13

Development

Answer 13

The application of research findings or other knowledge to a plan or design for the production of new or substantially improved materials , devices, products, processes , systems or services before start of commercial production and use

Question 14

Development expenditure is recognized as intangible asset if

Answer 14

1. Project is technically feasible
2. Entity intends to complete the intangible asset and then use it or sell it
3. Intangible asset will generate future economic benefits
4. It has adequate resources to complete the project
5. It can reliably measure the expenditure on the project