Page 192 - F1 Integrated Workbook STUDENT 2018
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Chapter 11
2.6 Amortisation
Intangible assets should be amortised over their useful life beginning when income
will be generated from the development, i.e. production/sales begins.
An intangible asset with an indefinite life is not amortised but instead is subject to
annual impairment reviews.
Note – Development costs can only be capitalised if the meet the criteria in IAS
38. If not they must be written off as an expense to the statement of profit or
loss.
2.7 Revaluations
Intangible assets may be revalued to their fair value. The fair value should be
determined by an active market.
An active market exists where all of the following conditions are met:
items traded in the market are homogenous
willing buyers and sellers can be found at any time
prices are available to the public
IAS 38 Intangible Assets, states it is ‘uncommon’ for an active market to exist for
intangible assets.
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