Page 153 - IC26 LIFE INSURANCE FINANCE

f. Its ability to measure the expenditure attributable to the intangible asset during

its development reliably.

All expenditure incurred for development till all of the recognition criteria are met must

be recognised as expense by transfer to Profit & Loss A/c. Cost incurred subsequent to

meeting all of recognition criteria can be capitalised as intangible asset.

Subsequent Expenditure

Subsequent expenditure on an intangible asset after its purchase or its completion should be

recognised as an expense when it is incurred unless:

a. It is probable that the expenditure will enable the asset to generate future economic

benefits in excess of its originally assessed standard of performance and

b. The expenditure can be measured and attributed to the asset reliably.

If these conditions are met, the subsequent expenditure should be added to the cost of the

intangible asset.

Subsequent expenditure on brands, mastheads, publishing titles, customer lists and items

similar in substance is always recognised as an expense to avoid the recognition of

internally generated goodwill.

After initial recognition, an intangible asset should be carried at its cost less any accumulated

amortisation and any accumulated impairment losses.

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