Accounting Treatment Prescribed by IAS 38
IAS 38 prescribes the accounting treatment about to intangible assets, except:
a) Intangible assets which are under the scope of another Standard. Assume an example; IAS 2 Inventories applies in the ordinary course of business to intangible assets held for sale;
b) Mineral expenditure and rights on exploration for, or extraction and development of non-regenerative resources.
An intangible asset is initially known as at cost whether all of the following criteria are met:
a) The asset meets the definition of an intangible asset i.e. it is identifiable and controlled by the entity;
b) It is probable which future economic advantage such are attributable to the asset will flow to the entity;
c) The cost of the asset can be measured consistently.
Internally generated mastheads, brands, publishing titles, goodwill, customer lists and same items are not found as assets. Expenditure on research is recognized as an expense. There is no identification of an intangible asset arising from research. An intangible asset arising from growth is recognized only whether particular criteria are met.
Whether an intangible item does not meet the criteria for recognition as an asset, the expenditure is found as an expense whenever incurred. Expenditure such was initially identified as an expense is not involved in the cost of an intangible asset at a later date.