IAS 38 Intangible Assets

IAS 38 Intangible Assets sets out the criteria for recognizing and measuring intangible assets and requires disclosures about them. An intangible asset is an identifiable non-monetary asset without physical substance. Such an asset is identifiable when it is separable, or when it arises from contractual or other legal rights. Separable assets can be sold, transferred, licensed, etc. Examples of intangible assets include computer software, licenses, trademarks, patents, films, copyrights and import quotas. Goodwill acquired in a business combination is accounted for in accordance with IFRS 3 Business Combinations and is outside the scope of IAS 38 Intangible Assets. Internally generated goodwill is within the scope of IAS 38 Intangible Assets but is not recognised as an asset because it is not an identifiable resource.

Expenditure for an intangible item is recognised as an expense, unless the item meets the definition of an intangible asset, and:

  • It is probable that there will be future economic benefits from the asset; and
  • The cost of the asset can be reliably measured.

The cost of generating an intangible asset internally is often difficult to distinguish from the cost of maintaining or enhancing the entity’s operations or goodwill. For this reason, internally generated brands, mastheads, publishing titles, customer lists and similar items are not recognised as intangible assets. The costs of generating other internally generated intangible assets are classified into whether they arise in a research phase or a development phase. Research expenditure is recognised as an expense. Development expenditure that meets specified criteria is recognised as the cost of an intangible asset.

Intangible assets are measured initially at cost. After initial recognition, an entity usually measures an intangible asset at cost less accumulated amortization. It may choose to measure the asset at fair value in rare cases when fair value can be determined by reference to an active market.

An intangible asset with a finite useful life is amortized and is subject to impairment testing. An intangible asset with an indefinite useful life is not amortized, but is tested annually for impairment. When an intangible asset is disposed of, the gain or loss on disposal is included in profit or loss.

IAS 38 Intangible Assets is Copyright: IFRS Foundation


IFRSInternational Financial Reporting Standards0IFRS
IAS38IAS 38 Intangible Assets1IAS38


IAS36IAS 36 Impairment of AssetsIAS36
IFRS03IFRS 3 Business CombinationsIFRS03
IAS 38 Intangible Assets International Financial Reporting Standards 10038 1 IAS, IFRS, Standard, Financial, Accounting, Intangible Assets, Assets, Intangibles, Non-monetary IAS 38 sets out the criteria for recognizing and measuring intangible assets and requires disclosures about them