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Hello, in question of 33 Calendar Co in BPP kit version 2022.
“Intangible assets held for sale in the ordinary course of business are outside the
scope of IAS 38 and ore instead accounted for in accordance with IAS 2 Inventories. The
fact that the development project was classified as an intangible asset upon initial
recognition further suggests that it was not held for sale in the ordinary course of business”
_ Extracted from answer_I am so confused. The answer say, Intangible asset held for sale in the ordinary course of business. But the sale of development of project is not the main business activity. So, what is the treatment ? IAS 2 ?
Please give me the explanation. Thanks !
If they buy and sell intangibles in the same way as a butcher buys and sells sausages, it’s inventory.
If they use the intangible long term it’s a non-current asset subject to the held for sale rules.
All they want to see is that you can discuss the principles – your conclusion may differ from the suggested solution – that’s fine (as long as you take account of everything in the scenario).
Be calm.
🙂
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