Page 31 - Finac1 Test 3 slides - 2. Intangible Assets

TEST 3 PREPARATION

Useful Life

• An intangible asset with a finite useful life is amortised, and

an intangible asset with an indefinite useful life is not. (IAS
38.89)

• The term "indefinite" does not mean "infinite". The useful
life of an intangible asset reflects only that level of future

maintenance expenditure required to maintain the asset at
its standard of performance assessed at the time of

estimating the asset's useful life, and an entity's ability and

intention to reach such a level. (IAS 38.91)

• The useful life of an intangible asset that arises from

contractual or other legal rights shall not exceed the period
of the contractual or other legal rights, but may be shorter

depending on the period over which the entity expects to
use the asset.

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