4 Intangible assets

Asset

A resource controlled by an entity from which future economic benefits are expected to flow.

Intangible Asset

An identifiable non-monetary asset without physical substance, defined under IAS 38.

Recognition Criteria for Intangible Assets

An intangible asset must be identifiable, controlled by the entity, and expected to provide future economic benefits.

Costs Excluded from Recognition as Intangible Assets

Certain costs, such as those related to research and development, are specifically excluded from recognition under IAS 38.

Research Phase Costs

Activities aimed at obtaining knowledge. Costs are expensed as incurred

Capitalisation of Development Phase Costs

Strict criteria must be met, including technical feasibility and intention to complete the asset for capitalisation.

Development phase

Activities focused on applying knowledge to develop products or processes. Costs are capitalised if specific criteria are met

Revaluation Model for Intangible Assets

The revaluation model can be applied when an active market exists for the intangible asset.

Conditions for Reliable Fair Value Measurement

Fair value must be measured reliably under the revaluation model when market values are readily available.

Revaluation Gains and Losses Treatment

Revaluation gains are recognised in other comprehensive income, while losses may be recognised in profit or loss.

Amortisation of Finite-Life Intangible Assets

Finite-life intangible assets should be amortised on a systematic basis over their useful life.

Amortisation Start and Cessation

Amortisation begins when the asset is available for use and ceases when it is derecognised.

Treatment of Indefinite-Life Intangible Assets

Indefinite-life intangible assets are not amortised but are subject to annual impairment testing under IAS 38.

Impairment Review for Indefinite-Life Intangible Assets

An impairment review is required annually or when there is an indication that the asset may be impaired.

Derecognition of Intangible Assets

Intangible assets should be derecognised when disposed of or when no future economic benefits are expected.

Gains or Losses from Disposal of Intangible Assets

Gains or losses are reported in profit or loss upon disposal.

Key Disclosure Requirements for Intangible Assets

Disclosure of classes of intangible assets, their useful lives, amortisation methods, and any impairment losses.

Additional Disclosures for Revaluation Model

If the revaluation model is applied, disclosures must include the effective date, methods, and assumptions used.

Research and Development Costs Disclosure

Disclosure is required of the amounts recognised as expenses related to research and development activities.

Goodwill under IFRS 3

Goodwill is defined as the excess of the cost of an acquired entity over the fair value of its identifiable net assets.

Prohibition of Self-Generated Goodwill Recognition

Self-generated goodwill is prohibited from recognition to ensure that only verifiable assets are included in financial statements.