Scope of IAS 38
Applies to all intangible assets except those:
Covered in another IFRS
Involving certain mining rights
E.g. intangible assets that:
Definition of an intangible asset
Identifiable Can be separated from an entity (sold, transferred, licensed, rented,
exchanged individually or together with related contracts, asset or liability,
regardless of intention) OR
Arises from contractual or legal rights regardless of transferability or
separability
Non-monetary Not money or another asset receivable in a fixed or determinable amount of
money
Asset Resource: something that can be used to help to support a business
Control: ability to restrict access to economic benefits; power to obtain
future economic benefits (can prove with legally enforceable rights)
Past events: the event that causes the control (be specific - when?)
Expected future economic benefit: (give example of what the expected
benefit is)
Without physical Can’t see or touch
substance Physical and non-physical use
Determine which is more significant & use professional judgement to
decide whether to apply IAS 16 or IAS 38
Initial measurement
Obtain through:
Cash purchase (separate)
Exchange for another asset
Business combination
CASH
Separately acquired intangible assets’ cost includes:
1. Purchase price
Deduct: discounts, rebates, refundable taxes, interest included
Add: import duties, non-refundable taxes
2. Directly attributable costs
Must be necessary to bring the asset to current condition that enables it to be used as
intended by management (not including installation cost)
Applies to all intangible assets except those:
Covered in another IFRS
Involving certain mining rights
E.g. intangible assets that:
Definition of an intangible asset
Identifiable Can be separated from an entity (sold, transferred, licensed, rented,
exchanged individually or together with related contracts, asset or liability,
regardless of intention) OR
Arises from contractual or legal rights regardless of transferability or
separability
Non-monetary Not money or another asset receivable in a fixed or determinable amount of
money
Asset Resource: something that can be used to help to support a business
Control: ability to restrict access to economic benefits; power to obtain
future economic benefits (can prove with legally enforceable rights)
Past events: the event that causes the control (be specific - when?)
Expected future economic benefit: (give example of what the expected
benefit is)
Without physical Can’t see or touch
substance Physical and non-physical use
Determine which is more significant & use professional judgement to
decide whether to apply IAS 16 or IAS 38
Initial measurement
Obtain through:
Cash purchase (separate)
Exchange for another asset
Business combination
CASH
Separately acquired intangible assets’ cost includes:
1. Purchase price
Deduct: discounts, rebates, refundable taxes, interest included
Add: import duties, non-refundable taxes
2. Directly attributable costs
Must be necessary to bring the asset to current condition that enables it to be used as
intended by management (not including installation cost)
