IAS-38 – Intangible Assets

The standard states that:

(i) an intangible asset should be recognised, in the financial statements, if, and only if:

(a) it is probable that the expected future economic benefits that are attributable to the asset will flow to the enterprise; and

(b) the cost of the asset can be measured reliably.

(ii) An entity shall assess the probability of expected future economic benefits using reasonable and supportive assumptions that represent management’s best estimate of the set of economic conditions that will exist over the useful life of the asset.

(iii) Internally generated goodwill shall not be recognized as an asset.

(iv) No intangible asset arising from research shall be recognized.

(v) An intangible asset arising from development shall be recognized subject to specified conditions.

(vi) Expenditure on an intangible item that was initially recognized as an expense shall not be recognized as part of the cost of an intangible asset at a latter date.

(vii) The accounting for an intangible asset is based on its useful life.

(viii) An intangible asset shall be derecognised on disposal or when no future economic benefits are expected from its use or disposal.