(IFRS) for Small and Medium-sized Entities (SMEs)

IFRS FOR SMES – JULY 2009Internally generated intangible assets18.14 An entity shall recognise expenditure incurred internally on an intangible item,including all expenditure for both research and development activities, as anexpense when it is incurred unless it forms part of the cost of another asset thatmeets the recognition criteria in this IFRS.18.15 As examples of applying the preceding paragraph, an entity shall recogniseexpenditure on the following items as an expense and shall not recognise suchexpenditure as intangible assets:(a)(b)(c)(d)(e)(f)internally generated brands, logos, publishing titles, customer lists anditems similar in substance.start-up activities (ie start-up costs), which include establishment costs suchas legal and secretarial costs incurred in establishing a legal entity,expenditure to open a new facility or business (ie pre-opening costs) andexpenditure for starting new operations or launching new products orprocesses (ie pre-operating costs).training activities.advertising and promotional activities.relocating or reorganising part or all of an entity.internally generated goodwill.18.16 Paragraph 18.15 does not preclude recognising a prepayment as an asset whenpayment for goods or services has been made in advance of the delivery of thegoods or the rendering of the services.Past expenses not to be recognised as an asset18.17 Expenditure on an intangible item that was initially recognised as an expenseshall not be recognised at a later date as part of the cost of an asset.Measurement after recognition18.18 An entity shall measure intangible assets at cost less any accumulatedamortisation and any accumulated impairment losses. The requirements foramortisation are set out in this section. The requirements for recognition ofimpairment are set out in Section 27 Impairment of Assets.Amortisation over useful life18.19 For the purpose of this IFRS, all intangible assets shall be considered to have afinite useful life. The useful life of an intangible asset that arises from contractualor other legal rights shall not exceed the period of the contractual or other legalrights, but may be shorter depending on the period over which the entity expects100 © IASCF