View Chapter 12_ Intangible Assets - Intermediate Accounting_ IFRS Edition, 2nd Edition.pdf from ACCOUNTING MISC at Unity University College. Chapter 12: Intangible Assets - …
In this case, we would include the expenditures in our intangible asset balance. However, we would likely amortize the asset over a fixed term. In addition to the R&D expense reported in 2019 and 2020, Sirius incurred the following expenditures: Year 2018 2017 2016 2015 2014 2013 2012 2011 2010 R&D Costs 106 .0 97 .0 69 .0 55 .0 54 .0 51 .0 43 ...
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2 Customer Related Intangible Assets Examples Customer lists order or production from ACCOUNTING 302 at Indian Institutes of Management
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Expenditures on development or on development phase of an internal project are recognised as intangible assets if, and only if, an entity can demonstrate all of the following (IAS 38.57): 1 the technical feasibility of completing the intangible asset so that it will be available for use or sale, 2 its intention to complete the intangible asset and use or sell it, 3 its ability to use or sell the intangible asset, 4 how the intangible asset will generate probable future economic benefits, 5 the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset, 6 its ability to measure reliably the expenditure attributable to the intangible asset during its development.
Separate acquisition of intangible assets is not to be confused with acquisition of services that are used by the entity do develop an intangible asset internally. In such a case, the requirements for internally generated intangible assets apply.
Paragraph IAS 38.70 explains that prepayments can be recognised as assets even if the goods or services to be received will be recognised as an expense. Such an asset represents the right to receive goods or services. See the example below and paragraphs IAS 38.BC46A-BC46I for more IASB’s discussion.
Software as a Service (SaaS) Software as a Service (SaaS) solutions cannot be recognised as intangible assets because in SaaS model, the customer does not have the power to obtain the future economic benefits flowing from the software itself and to restrict others’ access to those benefits.
IAS 38 provides a framework for recognition of internally generated intangible assets that helps identifying whether and when there is an identifiable asset that will generate expected future economic benefits and determining the cost of the asset reliably. To facilitate this process, IAS 38 classifies the generation of the asset into a research phase and a development phase (IAS 38.51-52).
Research is defined (IAS 38.8) as original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding. Examples of research activities are given in paragraph IAS 38.56 and include obtaining new knowledge or searching for alternative solutions.
Development is defined (IAS 38.8) as the application of research findings or other knowledge to a plan or design for the production of new or substantially improved materials, devices, products, processes, systems or services before the start of commercial production or use. Examples of development activities are given in paragraph IAS 38.59 and include design, construction and testing of prototypes or pilots.