IAS 38 Intangible Assets
IAS 38 deals with identifiable non-monetary assets without physical substance, such as qualifying software, licences and development assets. Recognition requires relevant asset criteria, and internally generated research is expensed. Development is capitalised only once all specified conditions are demonstrated. Finite-life assets are amortised from availability for use; impairment requirements also apply. Internally generated goodwill is not recognised as an asset.
Worked example
A purchased five-year software licence can be recognised at qualifying cost and amortised over its expected useful life, which may be shorter than five years.
Common mistake
The useful life is not automatically the legal life, and spending on research or advertising does not automatically create a recognisable intangible asset.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | FR | Direct | Official assessment-window verification pending |
| ACCA | K1 | Direct | July 2027–August 2028 |
| ACCA | SBR | Direct | Official assessment-window verification pending |
| CIMA | BA3 | Direct | Official assessment-window verification pending |
| CIMA | F2 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |