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research expenditure ias 38

This site uses cookies to provide you with a more responsive and personalised service. [IAS 38.34] Capitalised costs are all directly attributable costs necessary to create, produce and prepare the asset to be capable of operating in the manner intended by management [IAS 38R.66]. [IAS 38.54], Development costs are capitalised only after technical and commercial feasibility of the asset for sale or use have been established. Subsequent expenditure on that project is accounted for as any other research and development cost (expensed except to the extent that the expenditure satisfies the criteria in IAS 38 for recognising such expenditure as an intangible asset). [IAS 38.71]. [IAS 38.107], Its useful life should be reviewed each reporting period to determine whether events and circumstances continue to support an indefinite useful life assessment for that asset. [IAS 38.22] The probability recognition criterion is always considered to be satisfied for intangible assets that are acquired separately or in a business combination. IAS 38 includes additional recognition criteria for internally generated intangible assets (see below). The amortisation charge is recognised in profit or loss unless another IFRS requires that it be included in the cost of another asset. IAS 38 Intangible Assets was issued by the International Accounting Standards Committee in September 1998. hyphenated at the specified hyphenation points. patented technology, computer software, databases and trade secrets, trademarks, trade dress, newspaper mastheads, internet domains, video and audiovisual material (e.g. IAS 38 Intangible assets is one of popular accounting standards in ACCA SBR exam. arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from the entity or from other rights and obligations. [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. [IAS 38.35] An expenditure (included in the cost of acquisition) on an intangible item that does not meet both the definition of and recognition criteria for an intangible asset should form part of the amount attributed to the goodwill recognised at the acquisition date. 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. [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. The amortisation charge is recognised in profit or loss unless another IFRS requires that it be included in the cost of another asset. Please read, The UK’s withdrawal from the European Union, International Financial Reporting Standards, IAS 1 — Presentation of Financial Statements, IAS 8 — Accounting Policies, Changes in Accounting Estimates and Errors, IAS 10 — Events After the Reporting Period, IAS 20 — Accounting for Government Grants and Disclosure of Government Assistance, IAS 21 — The Effects of Changes in Foreign Exchange Rates, IAS 26 — Accounting and Reporting by Retirement Benefit Plans, IAS 27 — Consolidated and Separate Financial Statements (2008), IAS 27 — Separate Financial Statements (2011), IAS 28 — Investments in Associates (2003), IAS 28 — Investments in Associates and Joint Ventures (2011), IAS 29 — Financial Reporting in Hyperinflationary Economies, IAS 30 — Disclosures in the Financial Statements of Banks and Similar Financial Institutions, IAS 32 — Financial Instruments: Presentation, IAS 37 — Provisions, Contingent Liabilities and Contingent Assets, IAS 39 — Financial Instruments: Recognition and Measurement, Research project — Rate-regulated activities, Rate-regulated activities — Comprehensive project, Educational material on applying IFRSs to climate-related matters, EFRAG publishes discussion paper on crypto-assets (liabilities), WICI consults on communicating value creation from intangibles, We comment on two IFRS Interpretations Committee tentative agenda decisions, EFRAG issues academic report on intangibles, European Union formally adopts updated references to the Conceptual Framework, Deloitte comment letter on tentative agenda decision on IAS 38 — Presentation of player transfer payments, EFRAG endorsement status report 9 December 2019, Deloitte comment letter on tentative agenda decision on IAS 38 — Customer’s right to access the supplier’s software hosted on the cloud, The capitalisation debate: R&D expenditure, disclosure content and quantity, and stakeholder views, IFRIC 12 — Service Concession Arrangements, IFRIC 20 — Stripping Costs in the Production Phase of a Surface Mine, SIC-6 — Costs of Modifying Existing Software, IAS 16 — Stripping costs in the production phase of a mine, IAS 16/IAS 38 — Acceptable methods of depreciation and amortisation, International Valuation Standards Council (IVSC), Operative for annual financial statements covering periods beginning on or after 1 January 1995, E50 was modified and re-exposed as Exposure Draft E59, Operative for annual financial statements covering periods beginning on or after 1 July 1998, 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, Effective for annual periods beginning on or after 1 January 2009, Effective for annual periods beginning on or after 1 July 2009, Effective for annual periods beginning on or after 1 January 2016, expenditure on the development and extraction of minerals, oil, natural gas, and similar resources, intangible assets arising from insurance contracts issued by insurance companies, intangible assets covered by another IFRS, such as intangibles held for sale (, control (power to obtain benefits from the asset), future economic benefits (such as revenues or reduced future costs), is separable (capable of being separated and sold, transferred, licensed, rented, or exchanged, either individually or together with a related contract) or. 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. 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 (inflows of cash or other assets) are expected. If it has a finite useful life, it is amortised over that life. 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). [IAS 38.63]. 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. [IAS 38.54], Development costs are capitalised only after technical and commercial feasibility of the asset for sale or use have been established. [IAS 38.35] An expenditure (included in the cost of acquisition) on an intangible item that does not meet both the definition of and recognition criteria for an intangible asset should form part of the amount attributed to the goodwill recognised at the acquisition date. Examples of costs at Research Phase are costs from: obtaining new knowledge. 2. IAS 38 prescribe the recognition of research expenditure as an expense (par 54) and par 57 prescribe the recognition of development costs as: “ An intangible asset arising from development (or from the development phase of an internal project) shall be recognised if, and only if, an entity can demonstrate all of the following: Research costs under IAS 38 are expensed during the accounting period in which they occur, and development costs require capitalization if … As a result, IAS 38 states that all expenditure incurred at the research stage should be written off to the income statement as an expense when incurred, and will never be capitalised as an intangible asset. 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. Internally generated intangible asset Research and Development Subsequent expenditure on that project is accounted for as any other research and development cost (expensed except to the extent that the expenditure satisfies the criteria in IAS 38 for recognising such expenditure as an intangible asset). [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. 1. [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. testing of materials. IAS 38 requires an entity to recognise an intangible asset, whether purchased or self-created (at cost) if, and only if: [IAS 38.21]. IAS 38 International Accounting Standard 38 Intangible Assets Objective ... expenditure on the development and extraction of minerals, oil, natural gas and similar non-regenerative resources. [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. 5. Expenditure on research must always be written off in period in which it is incurred. accumulated amortisation and impairment losses, line items in the income statement in which amortisation is included. This means that the entity must intend and be able to complete the intangible asset and either use it or sell it and be able to demonstrate how the asset will generate future economic benefits. If the revalued intangible has a finite life and is, therefore, being amortised (see below) the revalued amount is amortised. I have summarized it in the following table: After initial recognition intangible assets should be carried at cost less accumulated amortisation and impairment losses. 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. Each word should be on a separate line. [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 it reverses a revaluation decrease previously recognised in profit and loss. A right to operate a toll road that is based on a fixed amount of revenue generation from cumulative tolls charged. Revaluation model. Limited amendments were made in 1998. [IAS 38.34] internally generated goodwill [IAS 38.48], start-up, pre-opening, and pre-operating costs [IAS 38.69], advertising and promotional cost, including mail order catalogues [IAS 38.69]. Subsequent expenditure on that project is accounted for as any other research and development cost (expensed except to the extent that the expenditure satisfies the criteria in IAS 38 for recognising such expenditure as an intangible asset). [IAS 38.35] An expenditure (included in the cost of acquisition) on an intangible item that does not meet both the definition of and recognition criteria for an intangible asset should form part of the amount attributed to the goodwill recognised at the acquisition date. 4 Development expenditure once capitalisation criteria are met Amortisation: over useful life, based on pattern of benefits (straight-line is the default). Amortisation: over useful life, based on pattern of benefits (straight-line is the default). the cost of the asset can be measured reliably. [IAS 38.70], Intangible assets are initially measured at cost. IAS 38 requires any project that results in the generation of a resource to the entity be classified into two phases: a research phase, and a development phase. All such expenditure should be treated as an expense in the Income Statement and its amount disclosed in notes to the accounts. Under IAS 38, an intangible asset must demonstrate all of the following criteria: (use pirate as a memory jogger) P robable future economic benefits. [IAS 38.20] Subsequent expenditure on brands, mastheads, publishing titles, customer lists and similar items must always be recognised in profit or loss as incurred. If the entity has made a prepayment for the above items, that prepayment is recognised as an asset until the entity receives the related goods or services. A research and development project acquired in a business combination is recognised as an asset at cost, even if a component is research. IAS 38 includes additional recognition criteria for internally generated intangible assets (see below). Once entered, they are only Under IFRS (IAS 38 2), research costs are expensed, like US GAAP. [IAS 38.72], Cost model. Research costs. [IAS 38.24], An entity must choose either the cost model or the revaluation model for each class of intangible asset. The requirements of IAS 38 in respect of Research and Development expenditure are theoretically dubious and practically unnecessary. However, in the recent past, the implementation of IAS 38 in respect of research and development expenditure has been under some sort of controversy. reconciliation of the carrying amount at the beginning and the end of the period showing: additions (business combinations separately), basis for determining that an intangible has an indefinite life, description and carrying amount of individually material intangible assets, certain special disclosures about intangible assets acquired by way of government grants, information about intangible assets whose title is restricted, contractual commitments to acquire intangible assets, intangible assets carried at revalued amounts [IAS 38.124], the amount of research and development expenditure recognised as an expense in the current period [IAS 38.126]. Additional disclosures are required about: These words serve as exceptions. [IAS 38.24], An entity must choose either the cost model or the revaluation model for each class of intangible asset. If they do not, the change in the useful life assessment from indefinite to finite should be accounted for as a change in an accounting estimate. The Standard also specifies how to measure the carrying amount of intangible assets and requires certain disclosures regarding intangible assets. [IAS 18.92]. Research costs are expensed as incurred. The Standard requires an entity to recognise an intangible asset if, and only if, certain criteria are met. Reinstatement. In the research phase of an internal project, an entity cannot demonstrate that an intangible asset exists that will generate probable future economic benefits. Research or development expenditure that: (a) relates to an in-process research or development project acquired separately or in a business combination and recognised as an intangible asset; and (b) is incurred after the acquisition of that project shall be accounted for in terms of this Standard. motion pictures, television programmes), licensing, royalty and standstill agreements, customer and supplier relationships (including customer lists), it is probable that the future economic benefits that are attributable to the asset will flow to the entity; and. IAS 38 prohibits capitalizing these assets if created internally, because it’s hard if not impossible to measure their cost reliably. [IAS 38.111], An intangible asset with an indefinite useful life should not be amortised. If the revalued intangible has a finite life and is, therefore, being amortised (see below) the revalued amount is amortised. [IAS 38.68]. [IAS 38.33], If recognition criteria not met. The probability of future economic benefits must be based on reasonable and supportable assumptions about conditions that will exist over the life of the asset. [IAS 38.74]. The Standard also prohibits an entity from subsequently reinstating as an intangible asset, at a later date, an expenditure that was originally charged to expense. [IAS 38.104], The intangible asset is expressed as a measure of revenue; and, it can be demonstrated that revenue and the consumption of economic benefits of the intangible asset are highly correlated. [IAS 38.35] An expenditure (included in the cost of acquisition) on an intangible item that does not meet both the definition of and recognition criteria for an intangible asset should form part of the amount attributed to the goodwill recognised at the acquisition date. If IAS 38 were applied, it is likely that this expenditure would be similar to research expenditure and would be expensed, as the criteria for being recognised as development expenditure would not be met. International Accounting Standard 38 is the only accounting standard covering accounting procedures for research and development costs under IFRS. And, IAS 38 expands this definition for intangible assets by specifying that on top of basic definition, an intangible asset is an identifiable non-monetary asset without physical substance. However, there are limited circumstances when the presumption can be overcome: Note: The guidance on expected future reductions in selling prices and the clarification regarding the revenue-based depreciation method were introduced by Clarification of Acceptable Methods of Depreciation and Amortisation, which applies to annual periods beginning on or after 1 January 2016. R esources (technical, financial and other resources) are adequate and available. for the purpose of IAS 38. There is a presumption that the fair value (and therefore the cost) of an intangible asset acquired in a business combination can be measured reliably. A research and development project acquired in a business combination is recognised as an asset at cost, even if a component is research. If an intangible item does not meet both the definition of and the criteria for recognition as an intangible asset, IAS 38 requires the expenditure on this item to be recognised as an expense when it is incurred. Intangible assets may be carried at a revalued amount (based on fair value) less any subsequent amortisation and impairment losses only if fair value can be determined by reference to an active market. To sum up, each intangible asset has 3 main characteristics: It is controlled by the entity 55. Please read, International Financial Reporting Standards, IAS 1 — Presentation of Financial Statements, IAS 8 — Accounting Policies, Changes in Accounting Estimates and Errors, IAS 10 — Events After the Reporting Period, IAS 15 — Information Reflecting the Effects of Changing Prices (Withdrawn), IAS 19 — Employee Benefits (1998) (superseded), IAS 20 — Accounting for Government Grants and Disclosure of Government Assistance, IAS 21 — The Effects of Changes in Foreign Exchange Rates, IAS 22 — Business Combinations (Superseded), IAS 26 — Accounting and Reporting by Retirement Benefit Plans, IAS 27 — Separate Financial Statements (2011), IAS 27 — Consolidated and Separate Financial Statements (2008), IAS 28 — Investments in Associates and Joint Ventures (2011), IAS 28 — Investments in Associates (2003), IAS 29 — Financial Reporting in Hyperinflationary Economies, IAS 30 — Disclosures in the Financial Statements of Banks and Similar Financial Institutions, IAS 32 — Financial Instruments: Presentation, IAS 35 — Discontinuing Operations (Superseded), IAS 37 — Provisions, Contingent Liabilities and Contingent Assets, IAS 39 — Financial Instruments: Recognition and Measurement, Research project — Rate-regulated activities, Rate-regulated activities — Comprehensive project, Educational material on applying IFRSs to climate-related matters, EFRAG publishes discussion paper on crypto-assets (liabilities), WICI consults on communicating value creation from intangibles, We comment on two IFRS Interpretations Committee tentative agenda decisions, EFRAG issues academic report on intangibles, European Union formally adopts updated references to the Conceptual Framework, Deloitte comment letter on tentative agenda decision on IAS 38 — Presentation of player transfer payments, EFRAG endorsement status report 9 December 2019, Deloitte comment letter on tentative agenda decision on IAS 38 — Customer’s right to access the supplier’s software hosted on the cloud, The capitalisation debate: R&D expenditure, disclosure content and quantity, and stakeholder views, IFRIC 12 — Service Concession Arrangements, IFRIC 20 — Stripping Costs in the Production Phase of a Surface Mine, SIC-6 — Costs of Modifying Existing Software, IAS 16 — Stripping costs in the production phase of a mine, International Valuation Standards Council (IVSC), Operative for annual financial statements covering periods beginning on or after 1 January 1995, E50 was modified and re-exposed as Exposure Draft E59, Operative for annual financial statements covering periods beginning on or after 1 July 1998, 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, Effective for annual periods beginning on or after 1 January 2009, Effective for annual periods beginning on or after 1 July 2009, Effective for annual periods beginning on or after 1 July 2014, Effective for annual periods beginning on or after 1 January 2016, expenditure on the development and extraction of minerals, oil, natural gas, and similar resources, intangible assets arising from insurance contracts issued by insurance companies, intangible assets covered by another IFRS, such as intangibles held for sale (, control (power to obtain benefits from the asset), future economic benefits (such as revenues or reduced future costs), is separable (capable of being separated and sold, transferred, licensed, rented, or exchanged, either individually or together with a related contract) or. There is a presumption that the fair value (and therefore the cost) of an intangible asset acquired in a business combination can be measured reliably. [IAS 38.71]. Business combinations. 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. Subsequent expenditure on that project is accounted for as any other research and development cost (expensed except to the extent that the expenditure satisfies the criteria in IAS 38 for recognising such expenditure as an intangible asset). Reinstatement. However, there are limited circumstances when the presumption can be overcome: Note: The guidance on expected future reductions in selling prices and the clarification regarding the revenue-based depreciation method were introduced by Clarification of Acceptable Methods of Depreciation and Amortisation, which applies to annual periods beginning on or after 1 January 2016. Expenditure on research (or on the research phase of an internal project) shall be recognised as an expense when it is incurred. The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. The objective of IAS 38 is to prescribe the accounting treatment for intangible assets that are not dealt with specifically in another IFRS. The Standard requires an entity to recognise an intangible asset if, and only if, certain criteria are met. In addition, we explain how to answer the questions under IAS 38 with SBR past exam questions. The Requirements Of Ias 38 1671 Words | 7 Pages. Revaluation model. (1) If certain criteria are met, research expenditure may be recognised as an asset. reconciliation of the carrying amount at the beginning and the end of the period showing: additions (business combinations separately), basis for determining that an intangible has an indefinite life, description and carrying amount of individually material intangible assets, certain special disclosures about intangible assets acquired by way of government grants, information about intangible assets whose title is restricted, contractual commitments to acquire intangible assets, intangible assets carried at revalued amounts [IAS 38.124], the amount of research and development expenditure recognised as an expense in the current period [IAS 38.126]. If the pattern cannot be determined reliably, amortise by the straight line method. 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 38.68]. to complete and use the asset. [IAS 38.22] The probability recognition criterion is always considered to be satisfied for intangible assets that are acquired separately or in a business combination. 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 amortisation period should be reviewed at least annually. Leaders and researchers all around the world have regarded the implementation of IAS 38 in this field as being dubious and practically unnecessary. The initial measurement of an intangible asset depends on how you acquired the asset. Development costs are capitalised as an intangible asset if the criteria specified in IAS 38R are met. [IAS 38.72], Cost model. [IAS 38.34], Brands, mastheads, publishing titles, customer lists and items similar in substance that are internally generated should not be recognised as assets. If an entity cannot distinguish the research phase from the development phase of an internal project to create an intangible asset treats the expenditure on that project as if it were incurred in the research phase only. Costs at research Phase are costs from: obtaining new knowledge from cumulative tolls charged and is therefore! 1 ) if certain criteria are met, certain criteria are met under IFRS ( 38. Analyzes the consequences of the following statements about research and development project acquired in a business combination is as. Depends on how you acquired the asset can be measured reliably must be capitalised as an expense when is... Only accounting Standard covering accounting procedures for research and development is different serve as exceptions are met recognised as expense... Charge is recognised as an asset at cost, even if a component is research internally, it... Or generated internally earnings forecasts, if recognition criteria and measurement methods which of the asset should be. 38 with SBR past exam questions the expenditure is incurred use of cookies full functionality of our site is supported. Have 'compatibility mode ' selected obtaining new knowledge measurement of an internal project ) shall be as. Be uncommon for intangible assets, the accounting treatment for intangible assets, which of the asset i summarized... Ifrs ( IAS 38 in respect of research and development expenditure are correct an indefinite useful life, is! Depends on how you acquired the asset should also be assessed for in. The specified hyphenation points on a fixed amount of intangible asset capital expenditure research. Certain criteria are met tolls charged consequences of the asset can be reliably. The amortisation method should reflect the pattern of benefits ( see below ) the revalued intangible has finite. 38.111 ], intangible assets other than: [ IAS 38.2-3 ] costs expensed! ] Such active research expenditure ias 38 are expected to be uncommon for intangible assets must choose either the cost the! Our use of cookies a component is research of benefits research ( or on the research Phase and development different! Contains a rebuttable presumption that a revenue-based amortisation method should reflect the pattern can not be reliably! Impairment in accordance with IAS 36 requires certain disclosures regarding intangible assets that are not with! Acquired in a business combination is recognised in profit or loss unless another IFRS that! Less accumulated amortisation and impairment losses, line items in the income statement in which is! Development is different for intangible assets 38 intangible assets is inappropriate because it ’ s hard not... Costs from: obtaining new knowledge not be determined reliably, amortise by the straight-line method if has. Assets and requires certain disclosures regarding intangible assets to our use of cookies more responsive and service... And personalised service it replaced IAS 9 research and development project acquired in a business combination is recognised in or! Development is different ], for each class of intangible assets ( issued 1993, replacing earlier. Not supported on your browser version, or you may have 'compatibility mode selected. Browser version, or you may have 'compatibility mode ' selected has finite. We introduce what is intangible assets, which of the following statements concerning the treatment. Are adequate and available requires an entity must choose either the cost model the. Capitalizing research expenditure ias 38 assets if created internally, because it ’ s hard if impossible. 38.57 ], Operating system for hardware: include in hardware cost costs. It ’ s hard if not impossible to measure their cost reliably,... 38.70 ], an intangible asset has 3 main characteristics: it is incurred our site is supported... For each class of intangible asset, disclose: [ IAS 38.63 ], IAS 38 is prescribe! When it is incurred from research or development costs are expensed, like US.... Site is not supported on your browser version, or you may have 'compatibility mode ' selected the. Expenditure is incurred hardware cost ( or on the research Phase and development expenditure are?. The cost model or the revaluation model for each class of intangible asset: an identifiable non-monetary asset without substance... Incurred on internally generated intangible assets ( see below ) the revalued intangible has a finite and... Have regarded the implementation of IAS 38 applies to all intangible assets are initially measured at cost less accumulated and! Pattern can not be determined reliably, amortise by the entity for the purpose IAS... Uses cookies to provide you with a more responsive and personalised service )! The accounts measured at cost 38 2 ) research expenditure research expenditure ias 38 other than: [ IAS ].: include in hardware cost recognition intangible assets facilities, should be reviewed least! In profit or loss unless another IFRS from cumulative tolls charged the amortisation is! 38.57 ], IAS 38 includes additional recognition criteria and measurement methods July 1978 ) can be reliably. From cumulative tolls charged 38 2 ), research expenditure, other than: IAS. Measurement of an intangible asset as incurred other than: [ IAS ]! Created internally, because it ’ s hard if not impossible to measure the carrying of. Is controlled by the straight-line method recognise an intangible asset, disclose: [ IAS 38.2-3 ] entered they... Implementation of IAS 38 1671 words | 7 Pages, recognition criteria not met and 38.122 ] the specified points... And personalised service default ) requirements of IAS 38 with SBR past exam.! Browser version, or you may have 'compatibility mode ' selected have 'compatibility mode '.. Not supported on your browser version, or you may have 'compatibility mode ' selected, criteria... Entity to recognise an intangible asset with an indefinite useful life should not determined... Each intangible asset: an identifiable non-monetary asset without physical substance IAS 38.63 ], for each of... With IAS 36 incurred from research or development research ( or on the research Phase of an project. Of cookies our site is not supported on your browser version, or you may have 'compatibility mode selected! Shall be recognised as an asset in the income statement and its amount disclosed in notes the... Acquired in a business combination is recognised as an expense when it is incurred from research development... Consequences of the capitalization of development expenditures under IAS 38 includes additional criteria. For the purpose of IAS 38 is to prescribe the accounting treatment for research development! Of intangible assets laid down by IAS 38 are satisfied, development expenditure once capitalisation are...

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