Technology-based intangible asset
Determine whether the item meets the IAS 38 definition and applicable recognition criteria. An acquired patent can be separately recognised; internally developed technology must satisfy the research and development rules before costs are capitalised. Measurement on acquisition and subsequent amortisation or impairment depend on the transaction and useful life. Ownership of technical knowledge alone does not guarantee recognition.
Worked example
A company purchases a patent for $100,000. If IAS 38’s criteria are satisfied, it recognises the patent at cost and subsequently accounts for amortisation or impairment as appropriate.
Common mistake
Capitalising all internally incurred research costs or assuming every technology-related expenditure creates an identifiable asset.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FR | Supporting | September 2026–June 2027 |
| ACCA | SBR | Direct | September 2026–June 2027 |