Intellectual or Intangible Asset

According to IAS 38.24, an intangible asset shall be measured initially at cost

According to IAS 38.25, normally, the PRICE an entity pays to acquire separately an intangible asset will reflect expectations about the probability that the expected future economic benefits embodied in the asset will flow to the entity.

According to IAS 38.33，in accordance with IFRS 3 Business Combinations, if an intangible asset is acquired in a business combination, the cost of that intangible asset is its FAIR VALUE at the acquisition date.

According to IAS 72, an entity shall choose either the COST MODEL in paragraph 74 or the REVALUATION MODEL in paragraph 75 as its accounting policy.

According to IAS 38.74，after initial recognition, an intangible asset shall be carried at its COST less any accumulated amortisation and any accumulated impairment losses.

According to IAS 38.75，after initial recognition, an intangible asset shall be carried at a revalued amount, being its FAIR VALUE at the date of the revaluation less any subsequent accumulated amortisation and any subsequent accumulated impairment losses, that at the end of the reporting period the carrying amount of the asset does not differ materially from its fair value.

According to IAS 38.8，carrying amount is the amount at which an asset is recognised in the statement of financial position after deducting any accumulated amortisation and accumulated impairment losses thereon.

According to IAS 38.79，the frequency of revaluations depends on the volatility of the fair values of the intangible assets being revalued. If the fair value of a revalued asset differs materially from its carrying amount, a further revaluation is necessary. Some intangible assets may experience significant and volatile movements in fair value, thus necessitating annual revaluation. Such frequent revaluations are unnecessary for intangible assets with only insignificant movements in fair value.

According to IAS 38.85，if an intangible asset’s carrying amount is INCREASED as a result of a REVALUATION, the increase shall be recognised in OTHER COMPREHENSIVE INCOME and accumulated in equity under the heading of revaluation surplus. However, the increase shall be recognised in profit or loss to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss.

According to IAS 38.86，if an intangible asset’s carrying amount is DECREASED as a result of a REVALUATION, the decrease shall be recognised in PROFIT OR LOSS. However, the decrease shall be recognised in other comprehensive income to the extent of any credit balance in the revaluation surplus in respect of that asset. The decrease recognised in other comprehensive income reduces the amount accumulated in equity under the heading of revaluation surplus.

According to IAS 38.97，the depreciable amount of an intangible asset with a finite useful life shall be allocated on a systematic basis over its useful life. The amortisation method used shall reflect the pattern in which the asset’s future economic benefits are expected to be consumed by the entity. If that pattern cannot be determined reliably, the straight-line method shall be used. The amortisation charge for each period shall be recognised in profit or loss unless this or another Standard permits or requires it to be included in the carrying amount of another asset.

According to IAS 38.97，a variety of amortisation methods can be used to allocate the depreciable amount of an asset on a systematic basis over its useful life. These methods include the straight-line method, the diminishing balance method and the unit of production method. The method used is selected on the basis of the expected pattern of consumption of the expected future economic benefits embodied in the asset and is applied consistently from period to period, unless there is a change in the expected pattern of consumption of those future economic benefits.

According to IAS 38.107，an intangible asset with an indefinite useful life shall not be amortised.

According to IAS 38.108，in accordance with IAS 36, an entity is required to test an intangible asset with an indefinite useful life for impairment by comparing its recoverable amount with its carrying amount: (a) annually