Page 22 - Finac1 Test 3 slides - 2. Intangible Assets

TEST 3 PREPARATION

Internally generated intangible assets

• It is sometimes difficult to assess whether or not an

internally generated intangible asset qualifies for
recognition. It is often difficult to determine:

• if there is an identifiable asset that will generate probable future
economic benefits, and

• the cost of the asset reliably. (IAS 38.51)

• To assess whether an internally generated intangible asset

meets the recognition criteria, the generation of an asset is

classified in:

• a research phase, and
• a development phase. (IAS 38.52)

• If an entity cannot distinguish the research phase from the
development phase of an internal project to create an

intangible asset, the entity treats the expenditure as if it
were incurred in the research phase only. (IAS 38.53)

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