IAS 38 - Intangible Assets – Definition

Please note this is a summary of IAS 38, for more detailed information please contact Brand Finance, or visit www.iasb.org

The objective of IAS 38 is to prescribe the accounting treatment for intangible assets that are not dealt with specifically in another IAS. The Standard requires an enterprise to recognise an intangible asset if, and only if, certain criteria are met. The Standard also specifies how to measure the carrying amount of intangible assets and requires certain disclosures regarding intangible assets.

IAS 38 applies to all intangible assets other than:

  • Financial assets
  • Mineral rights and exploration and development costs incurred by mining and oil and gas companies
  • Intangible assets arising from insurance contracts issued by insurance companies
  • Intangible assets covered by another IAS, such as intangibles held for sale, deferred tax assets, lease assets, assets arising from employee benefits, and goodwill. Goodwill is covered by IFRS 3

Key Areas of IAS 38


  • Recognition criteria
  • If recognition is not met
  • Business Combinations
  • Reinstatement

Initial Recognition

  • Research and Development Costs
  • In-process Research and Development Acquired in a Business Combination
  • Internally Generated Brands, Mastheads, Titles, Lists
  • Computer Software
  • Certain Other Defined Types of Costs

Initial Measurement

Measurement Subsequent to Acquisition: Cost Model and Revaluation Models Allowed

  • Cost Model
  • Revaluation Model

Classification of Intangible Assets Based on Useful Life

  • Indefinite Life
  • Measurement Subsequent to Acquisition: Intangible Assets with Indefinite Lives
  • Finite Life
  • Measurement Subsequent to Acquisition: Intangible Assets with Finite Lives

Subsequent Expenditure


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