26. If an intangible asset is acquired by way of a grant, IAS 38 states that there is a choice of recognition at fair value or at the nominal value of the grant. HKAS 38 requires an entity to recognise an intangible asset if, and only if, specified criteria are met. Such an asset is identifiable when: it is separable, i.e. IAS 38 Intangible Assets sets out the recognition criteria, measurement bases and disclosure requirements for intangible assets not dealt with specifically in another standard. Under UK accounting standards, intangible assets are accounted for using the rules from FRS 10, Goodwill and Intangibles. Previous Section Next Section . So, tax relief on intangible asset expenditure is given over however many years the asset benefits the business. capable of being separated or divided from the entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, asset or liability; or FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland deals with the issue of intangible assets (but not goodwill) at Section 18 Intangible Assets other than Goodwill.. Under Section 18, an intangible asset is recognised if they arise from either; a) contractual or legal rights or b) from being separable. The list contained the names, addresses and phone numbers of … IAS 38: Intangible Asset or Expense? The accounting standard IAS 38 sets out accounting treatment and disclosures to be applied to the recognition and measurement of intangible assets. Unlike previous UK GAAP, goodwill is not dealt with in the intangible assets section, instead it is dealt with in Section 19 Business Combinations and Goodwill. FRS 38 4 Financial Reporting Standard 38 Intangible Assets (FRS 38) is set out in paragraphs 1 – 133. by Silvia . View Test Prep - FRS_38_IE_(2015) from ACCOUNTING 101 at Business Management & Finance High School. FRS 102 definition of an intangible asset is now more in line with IFRS and expands on what is defined as an intangible asset in comparison to the old UK GAAP. You are here ... IAS 38 — Intangible Assets . Section 18.8 deals with intangible assets acquired in a business combination. Addresses requirements of IAS 38, Intangible Assets. Clarify your understanding of IAS 38 - intangible assets. This course is part of the IFRS Certificate Program — a comprehensive, integrated curriculum that will give you the foundational training, knowledge, and practical guidance in international accounting standards necessary in today's global business environment.. IAS 38 requires an entity to determine whether the useful life of an intangible asset is finite or indefinite. In this case, you amortize cost less residual value over the useful life of an asset. Intangible assets with finite lives: these have a limited period of benefit to the entity, for example, some software. Reporting Standard (FRS) 138 Intangible Assets. (FRS) 138 Intangible Assets, which is equivalent word-for- word to International Accounting Standard (IAS) 38 Intangible Assets and the determinants influencing the 2. Financial Reporting Standards Effective for annual periods beginning on 1 January 2018 Financial Reporting Standards (FRSs) refer to Financial Reporting Standards and Interpretations of Financial Reporting Standards issued by the ASC. IAS 38 permits intangible assets with both finite and indefinite useful lives. Intangible assets should be included in the balance sheet in accordance with FRS 38 “Intangible Assets”. This course defines what intangible assets are and how to set up the accounting treatment for these intangible assets. Interim reports – FRS 34 41 Industry-specific topics 32. This contrasts with old GAAP (FRS 10) where both of these conditions must be met before an intangible can be recognised. IAS 38 allows a policy choice when measuring intangible assets – cost model or revaluation model (IAS 38.72-73). Under Section 18, an intangible asset is recognised if they arise from either; a) contractual or legal rights or b) from being separable. Disposals of subsidiaries, businesses and non-current assets – FRS 105 38 27. Intangible assets are the main growth inducer in a knowledge economy and are becoming more important than the tangible assets. Volume C - UK Reporting - International Financial Reporting Standards Volume D - UK Reporting - IFRS 9 and related Standards Volume E - UK Reporting - IAS 39 and related Standards IFRS disclosures in practice Model annual report and financial statements for UK listed groups - IFRS Standards Goodwill acquired in a business combination (IFRS 3) Financial assets (as defined in LKAS 32 Financial Instruments: Presentation) Recognition and measurement of exploration and evaluation assets (e) rights held by a lessee under licensing agreements within the scope of SB-FRS 38 Intangible Assets for such items as motion picture films, video recordings, plays, manuscripts, patents and copyrights. Paragraph 2 to FRS 10 refers specifically to licences as an intangible asset and in the guidance on whether an intangible asset should be regarded as having a readily ascertainable market value. FRS 16, FRS 38 (Amended) Property, Plant and Equipment, Intangible Assets - Clarification of Acceptable Methods of Depreciation and Amortisation 11 FRS 16, FRS 41 (Amended) Property, Plant and Equipment, Agriculture - Bearer Plants 12 FRS 111 (Amended) Joint Arrangements - Accounting for Acquisitions of Interests in Joint Operations 12 intangible assets held by an entity for sale in the ordinary course of business; goodwill acquired in a business combination) • financial assets as defined in IAS 32 Financial instruments: Presentation Recently I had an argument with auditors of one company related to the customer list they bought. FRS 38 defines the intangible asset as: An identifiable non-monetary asset without physical substance. MFRS 138 : INTANGIBLE ASSET How to calculate initial cost??? Even though R&D can be an intangible asset in the UK, accounting for R&D is governed by its own accounting standard – SSAP 13, Accounting for Research and Development . The company paid significant amount of cash for the list of customers of telecommunications. Under cost model, an intangible asset is carried at cost less any accumulated amortisation and any accumulated impairment losses (IAS 38.74). All the paragraphs have equal authority. Equipment and FRS 38 Intangible Assets: Clarification of Acceptable Methods of Depreciation and Amortisation The amendments to FRS 16 prohibit entities from using a revenue-based depreciation method for items of property, plant and equipment. Volume C - UK Reporting - International Financial Reporting Standards Volume D - UK Reporting - IFRS 9 and related Standards Volume E - UK Reporting ... Illustrative Examples on IAS 38 Intangible Assets. treatment for intangible assets that are not dealt with specifically in another Standard. Section 18.8 deals with intangible assets acquired in a business combination. IAS 38 classifies intangible assets based on their useful life in two categories: 1. FRS 102 states that the cost of that intangible asset is its fair value at the date the grant becomes receivable. For intangible assets, the equivalent of depreciation is amortisation. Statements of Cash Flows – FRS 7 40 31. FINANCIAL REPORTING STANDARD Intangible Assets Illustrative Examples FRS 38 FRS 38 … D: Impairment losses for a cash generating unit are first applied to goodwill and then to other intangible assets before being applied to tangible assets HKAS 38 also specifies how to measure the carrying amount of intangible assets and requires specified disclosures about intangible assets. C: Expenditure on the prototype of a new engine cannot be classified as an intangible asset because the prototype has been assembled and has physical substance. IAS 38 applies to all intangible assets, except: • intangible assets within the scope of another standard (e.g.
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