International Financial Reporting Standards_guide.pdf

CHAPTER 13
Intangible Assets (IAS 38)
13.1 OBJECTIVE
An intangible asset is one that has no physical form, although it exists from contractual and
legal rights and has an economic value. The objective of IAS 38 is to allow entities to identify
and recognize separately the value of intangible assets on the Statement of Financial Position,
providing certain conditions are satisfied. IAS 38 enables users to more accurately assess the
value as well as the makeup of assets of the entity.
13.2 SCOPE OF THE STANDARD
IAS 38 applies to all intangible assets that are not specifically dealt with in another standard.
Examples include brand names, computer software, licenses, franchises, intangibles under
development, and goodwill. Examples of assets dealt with by other standards include Financial
Instruments, addressed in IAS 32, and the Exploration for and Evaluation of Mineral
Resources, addressed in IFRS 6.
IAS 38 prescribes the accounting treatment of intangible assets, including
■ the definition of an intangible asset;
■ recognition as an asset;
■ determination of the carrying amount;
■ determination and treatment of impairment losses; and
■ disclosure requirements.
13.3 KEY CONCEPTS
13.3.1 An intangible asset is an identifiable nonmonetary asset
■ without physical substance;
■ that is separable—in other words, that is capable of being separated from the entity and
sold, transferred, licensed, rented, or exchanged, either individually or together with a
related contract, asset, or liability; or
■ that arises from contractual or other legal rights, regardless of whether those rights are
transferable or separable from the entity or other rights and obligations.
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