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INTANGIBLE ASSETS

Recognition of an expense

• Expenditure on an intangible item shall be recognised as an expense when it is
incurred, unless:

• it forms part of the cost of an intangible asset that meets the recognition criteria; or
• the item is acquired in a business combination and cannot be recognised as an intangible
asset, and thus forms part of goodwill. (IAS 38.68)
• The following items are recognised as expenses:

• research costs
• expenditure on start-up activities unless the expenditure is included in the cost of an item
of property, plant and equipment (IAS 16). Start-up costs may consist of:
• establishment costs (legal and secretarial costs in establishing a legal entity);
• pre-opening costs (expenditure to open a new facility or business); and

• pre-operating costs (expenditure for starting new operations or launching new products or
processes).
• training costs

• advertising and promotional costs
• relocating or re-organising costs. (IAS 38.69)
• Expenditure on an intangible item that was initially recognised as an expense
shall not be recognised as part of the cost of an intangible asset at a later date.
(IAS 38.71)

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