Page 24 - 2018 Finac1 Test 3 Class 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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