The objective of IAS 38 is to prescribe the accounting treatment for intangible assets and identify how to recognise an intangible asset if, and only if, certain criteria are met. It also specifies how to measure the carrying amount of intangible assets and requires certain disclosures.
IAS 38 should be applied to all intangible assets, except:
intangible assets covered by another standard, e.g. those for sale in ordinary course of business, deferred tax assets, leases under IAS 17, employee benefits under IAS 19, goodwill;
financial assets as defined per IAS 32 and IAS 39;
mineral rights and exploration for oil and gas expenditure (see IFRS 6);
insurance contracts with policyholders (see IFRS 4).
Some intangibles may be contained in a physical asset, for example compact discs. Judgement is required to decide if IAS 16 or IAS 38 should be applied. Where software is not an integral part of related hardware, it is an intangible asset.
IAS 38 applies to advertising, training, start-up, and research and development. Licensing agreements, patents, copyrights etc. are excluded from IAS 17 and fall within the scope of IAS 38.
Intangible asset: an intangible asset is an identifiable non-monetary asset without physical substance.
Research: original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding.
Development: the application of research findings or other knowledge to a plan or design for the production of new...
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