IAS 38 Intangible Assets

by | Apr 23, 2020 | Uncategorized

Intangible assets definition: an identifiable non-monetary asset without physical substance. An asset is a resource that is controlled by the entity as a result of past events (for example purchase, or self-creation) and from which future economic benefits (inflow of cash or other assets) are expected.

Intangible assets are non-monetary assets which are without physical substance and identifiable. The objective of IAS 38 is to consider the intangible assets while calculating the total assets of the business. And it also specifies how to measure the caring amount on intangible assets and requires certain disclosures regarding intangible assets.

Intangibles can be acquired

  • By separate purchase
  • As a part of a business combination
  • By a government grant
  • By exchange of assets
  • By self-creation (internal generation)

An intangible asset with a finite useful life is amortized and is subject to impairment testing. An intangible asset which has an infinite useful life is not amortized, but is checked for impairment annually. By disposing of an intangible asset, the benefit or loss on sale shall be included in the profit or loss.

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