Intangible asset
An intangible asset is an identifiable non-monetary asset without physical substance. It is identifiable if separable or arising from contractual or other legal rights. Recognition also requires the applicable control, benefit and measurement conditions. Finite-life intangibles are amortised from availability for use; indefinite-life intangibles are not amortised and are tested annually for impairment. Research expenditure and internally generated brands are expensed; qualifying development expenditure can be capitalised.
Worked example
A purchased three-year licence costing $9,000 with zero residual value is normally amortised at $3,000 a year when available for use, assuming benefits are consumed evenly.
Common mistake
Legal rights can make an asset identifiable even if it cannot be sold separately. Goodwill is not a separately identifiable asset within IAS 38.
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 |
Related terms
Also called: Intangible non-current asset