Page 18 - PowerPoint Presentation

INTANGIBLE ASSETS

Separate acquisition

• Examples of expenditures that are not part of the cost of an

intangible asset are:

• costs of introducing a new product or service (including advertising
and promotional costs);

• costs of conducting business in a new location or with a new class of
customer (including staff training costs); and

• administration and other general overhead costs. (IAS 38.29)

• Some operations occur in connection with the development

of an intangible asset, but are not necessary to bring the asset

to the condition necessary for it to be capable of operating in

the manner intended by management.

• Because incidental operations are not necessary to bring an asset to

the condition necessary for it to be capable in operating in the
manner intended by management, the income and related expenses

of incidental operations are recognised in profit or loss. (IAS 38.31)

• If payment for an intangible asset is deferred beyond normal

credit terms, its cost is the cash price equivalent. (IAS 38.32)

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