"IAS 38: Intangible Assets"

IAS 38, Intangible Assets, is an International Accounting Standard that provides guidance on how to recognize, measure, and disclose intangible assets in the financial statements. Intangible assets are non-physical assets that have a useful life beyond one year and are controlled by an entity as a result of past events. Examples of intangible assets include patents, trademarks, copyrights, and software.

Under IAS 38, intangible assets can be recognized as an asset if they are identifiable, controllable, and have a probable future economic benefit. Intangible assets must be recognized at cost, which includes any costs necessary to acquire and bring the asset to its location and condition for its intended use.

Once recognized, intangible assets are measured at cost, less any accumulated amortization and impairment losses. Amortization is the systematic allocation of the cost of an intangible asset over its useful life. The useful life of an intangible asset is the period over which it is expected to generate economic benefits for the entity. The useful life of an intangible asset should be reviewed at least annually to determine if it needs to be revised.

If an intangible asset is impaired, the impairment loss is recognized as an expense in the income statement. An impairment loss is the amount by which the carrying amount of an intangible asset exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use.

IAS 38 requires entities to disclose information about the significant judgments and assumptions made in determining the useful life and amortization method of intangible assets. Entities must also disclose the amortization method used, the useful life of intangible assets, and the aggregate amortization expense for each class of intangible assets.

In summary, IAS 38 provides guidance on how to recognize, measure, and disclose intangible assets in the financial statements. Intangible assets are non-physical assets that have a useful life beyond one year and are controlled by an entity as a result of past events. Once recognized, intangible assets are measured at cost, less any accumulated amortization and impairment losses. Entities must disclose information about the significant judgments and assumptions made in determining the useful life and amortization method of intangible assets.

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