IAS38 (Intangible Assets)

Question 1

What are Intangible Assets?

Answer 1

An identifiable, non-monetary asset without physical substance.

Question 2

What is the recognition and measurement of an Intangible Asset?

Answer 2

1. Probable that the expected future economic benefits that are attributable to the asset will flow to the entity.
2. Cost of the asset can be measured reliably.

Question 3

How will research be recorded?

Answer 3

research may not give rise to future economic benefits, therefore should be written off as an expense.

Question 4

How will development be recorded?

Answer 4

Development must meet a certain criteria.

Question 5

How can an Intangible asset be identified?

Answer 5

Be capable of being separated or divided from the entity and sold, transferred, licensed, rented or exchanged either individually or together with a related contract asset or liability; or arise from contractual or other legal rights.

Question 6

Can internally generated goodwill be recognised as an asset?

Answer 6

No, it is not a separable asset, it does not arise from contractual rights and cannot be measured reliably.