📖 Overview
This standard addresses accounting treatment for intangible assets, including recognition, measurement (using cost model or revaluation model), amortization, and impairment testing. Intangible assets with finite lives are amortized, while those with indefinite lives are tested for impairment annually.
🎯 Scope
This standard applies to the accounting treatment for intangible assets, except:
- Intangible assets arising from customer contracts (IFRS 15).
- Deferred tax assets (IAS 12).
- Lease contracts (IFRS 16).
- Goodwill from business combinations (IFRS 3).
- Intangible assets held for sale (IFRS 5).
- Intangible assets in mining and oil sectors.
⚙️ Key Principles
**Recognition Conditions for an Intangible Asset:**
1. The asset is identifiable (separable or arising from contractual rights).
2. The entity controls the asset.
3. Future economic benefits are expected.
4. The cost can be reliably measured.
**Two Types of Intangible Assets:**
- **Finite Life**: Amortized.
- **Indefinite Life**: Not amortized, tested for impairment annually.
📏 Measurement
**Initial Measurement:**
- **Separate Purchase**: Actual cost (purchase price + fees + direct costs).
- **Internal Generation**: Development costs meeting capitalization criteria.
- **Acquired in Business Combination**: Fair value.
**Subsequent Measurement:**
- **Cost Model**: Cost - Accumulated Amortization - Impairment Losses.
- **Revaluation Model**: Fair Value - Subsequent Accumulated Amortization (requires active market).
**Research Costs**: Always expensed.
**Development Costs**: Capitalized if criteria are met.
✅ Recognition
**Recognition of Intangible Assets:**
- Recognized when acquired or developed.
- Internally generated brands, customer lists, mailing lists, and similar items are not recognized (expensed).
**Recognition of Subsequent Costs:**
- Expensed in the income statement, unless they increase future economic benefits of the asset.
📊 Presentation
**On the Statement of Financial Position:**
- Intangible assets appear within non-current assets.
- Accumulated amortization appears as a deduction from cost.
**On the Income Statement:**
- Amortization expense appears within operating expenses.
- Impairment losses appear as a separate expense.
**Note Disclosures:**
- Amortization method and useful life.
- Reconciliation of intangible asset movement.
📝 Disclosure Requirements
Disclosures required:
- Accounting policies for intangible assets.
- Amortization method used and useful lives.
- Gross carrying amount and accumulated amortization.
- Reconciliation of intangible asset changes (additions, disposals, amortization, impairment, revaluation).
- Restrictions on asset ownership.
- Contractual commitments to purchase intangible assets.
- Amount of research and development costs expensed during the period.
🔗 Related Standards
IAS 36 (Impairment of Assets), IFRS 3 (Business Combinations), IAS 16 (Property, Plant and Equipment)