Page 136 - F3 -FA Integrated Workbook STUDENT 2018-19

Chapter 9

1.2 Recognition

The criteria to recognise an intangible asset in the financial statements is as follows:

 “it should meet the definition of an intangible asset,

 the cost of the asset can be reliably measured, and

 it is probable that future economic benefits will be received by the entity
from the asset” (IAS 38, para 18).

If the above criteria can be established then initial recognition of an intangible asset
is always measured at cost.

For subsequent measurement, IAS 38 does permit the revaluation model to be used.
However, this is very rarely applicable as the required criteria are very specific and
so, to all intents and purposes, intangible assets are accounted for using the cost
model.

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