Intangible Assets - aasb.gov.au

1 compiled aasb Standard aasb 138 Intangible Assets This compiled Standard applies to annual periods beginning on or after 1 July 2021 but before 1 January 2023. Earlier application is permitted for annual periods beginning on or after 1 January 2014 but before 1 July 2021. It incorporates relevant amendments made up to and including 6 March 2020. Prepared on 21 July 2021 by the staff of the australian accounting standards board . Compilation no. 4 Compilation date: 30 June 2021 Authorised Version F2021C00883 registered 03/09/2021 aasb 138- compiled 2 COPYRIGHT Obtaining copies of accounting standards compiled versions of standards , original standards and amending standards (see Compilation Details) are available on the aasb website: australian accounting standards board PO Box 204 Collins Street West Victoria 8007 AUSTRALIA Phone: (03) 9617 7600 E-mail: Website: Other enquiries Phone: (03) 9617 7600 E-mail: COPYRIGHT Commonwealth of Australia 2021 This compiled aasb Standard contains IFRS Foundation copyright material.

2 Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source. Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to The National Director, australian accounting standards board , PO Box 204, Collins Street West, Victoria 8007. All existing rights in this material are reserved outside Australia. Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only. Further information and requests for authorisation to reproduce for commercial purposes outside Australia should be addressed to the IFRS Foundation at Authorised Version F2021C00883 registered 03/09/2021 aasb 138- compiled 3 CONTENTS Contents COMPARISON WITH IAS 38 accounting STANDARD aasb 138 Intangible Assets from paragraph OBJECTIVE 1 SCOPE 2 DEFINITIONS 8 Intangible Assets 9 Identifiability 11 Control 13 Future economic benefits 17 RECOGNITION AND MEASUREMENT 18 Separate acquisition 25 Acquisition as part of a business combination 33 Intangible asset acquired in a business combination 35 Subsequent expenditure on an acquired in-process research and development project 42 Acquisition by way of a

3 Government grant 44 Exchanges of Assets 45 Internally generated goodwill 48 Internally generated Intangible Assets 51 Research phase 54 Development phase 57 Cost of an internally generated Intangible asset 65 RECOGNITION OF AN EXPENSE 68 Past expenses not to be recognised as an asset 71 MEASUREMENT AFTER RECOGNITION 72 Cost model 74 Revaluation model 75 USEFUL LIFE 88 Intangible Assets WITH FINITE USEFUL LIVES Amortisation period and amortisation method 97 Residual value 100 Review of amortisation period and amortisation method 104 Intangible Assets WITH INDEFINITE USEFUL LIVES 107 Review of useful life assessment 109 RECOVERABILITY OF THE CARRYING AMOUNT IMPAIRMENT LOSSES 111 RETIREMENTS AND DISPOSALS 112 DISCLOSURE General 118 Intangible Assets measured after recognition using the revaluation model 124 Research and development expenditure 126 Other information 128 TRANSITIONAL PROVISIONS AND EFFECTIVE DATE Exchanges of similar Assets Early application Authorised Version F2021C00883 registered 03/09/2021 aasb 138- compiled 4 CONTENTS WITHDRAWAL OF IAS 38 (ISSUED 1998) COMMENCEMENT OF THE LEGISLATIVE INSTRUMENT WITHDRAWAL OF aasb PRONOUNCEMENTS APPENDIX A australian simplified disclosures for Tier 2 entities ILLUSTRATIVE EXAMPLES COMPILATION DETAILS DELETED IAS 38 TEXT AVAILABLE ON THE aasb WEBSITE Basis for Conclusions on IAS 38 australian accounting Standard aasb 138 Intangible Assets (as amended)

4 Is set out in paragraphs 1 and Appendix A. All the paragraphs have equal authority. Paragraphs in bold type state the main principles. aasb 138 is to be read in the context of other australian accounting standards , including aasb 1048 Interpretation of standards , which identifies the australian accounting Interpretations, and aasb 1057 Application of australian accounting standards . In the absence of explicit guidance, aasb 108 accounting Policies, Changes in accounting Estimates and Errors provides a basis for selecting and applying accounting policies. Authorised Version F2021C00883 registered 03/09/2021 aasb 138- compiled 5 COMPARISON Comparison with IAS 38 aasb 138 Intangible Assets as amended incorporates IAS 38 Intangible Assets as issued and amended by the International accounting standards board (IASB).

5 australian -specific paragraphs (which are not included in IAS 38) are identified with the prefix Aus . Paragraphs that apply only to not-for-profit entities begin by identifying their limited applicability. Tier 1 For-profit entities complying with aasb 138 also comply with IAS 38. Not-for-profit entities compliance with IAS 38 will depend on whether any Aus paragraphs that specifically apply to not-for-profit entities provide additional guidance or contain applicable requirements that are inconsistent with IAS 38. Tier 2 Entities preparing general purpose financial statements under australian accounting standards Simplified Disclosures (Tier 2) will not be in compliance with IFRS standards .

6 aasb 1053 Application of Tiers of australian accounting standards explains the two tiers of reporting requirements. Authorised Version F2021C00883 registered 03/09/2021 aasb 138- compiled 6 STANDARD accounting Standard aasb 138 The australian accounting standards board made accounting Standard aasb 138 Intangible Assets under section 334 of the Corporations Act 2001 on 14 August 2015. This compiled version of aasb 138 applies to annual periods beginning on or after 1 July 2021 but before 1 January 2023. It incorporates relevant amendments contained in other aasb standards made by the aasb up to and including 6 March 2020 (see Compilation Details). accounting Standard aasb 138 Intangible Assets Objective 1 The objective of this Standard is to prescribe the accounting treatment for Intangible Assets that are not dealt with specifically in another Standard.

7 This Standard requires an entity to recognise an Intangible asset if, and only if, specified criteria are met. The Standard also specifies how to measure the carrying amount of Intangible Assets and requires specified disclosures about Intangible Assets . Scope 2 This Standard shall be applied in accounting for Intangible Assets , except: (a) Intangible Assets that are within the scope of another Standard; (b) financial Assets , as defined in aasb 132 Financial Instruments: Presentation; (c) the recognition and measurement of exploration and evaluation Assets (see aasb 6 Exploration for and Evaluation of Mineral Resources); and (d) expenditure on the development and extraction of minerals, oil, natural gas and similar non-regenerative resources.

8 3 If another Standard prescribes the accounting for a specific type of Intangible asset, an entity applies that Standard instead of this Standard. For example, this Standard does not apply to: (a) Intangible Assets held by an entity for sale in the ordinary course of business (see aasb 102 Inventories). (b) deferred tax Assets (see aasb 112 Income Taxes). (c) leases of Intangible Assets accounted for in accordance with aasb 16 Leases. (d) Assets arising from employee benefits (see aasb 119 Employee Benefits). (e) financial Assets as defined in aasb 132. The recognition and measurement of some financial Assets are covered by aasb 10 Consolidated Financial Statements, aasb 127 Separate Financial Statements and aasb 128 Investments in Associates and Joint Ventures.

9 (f) goodwill acquired in a business combination (see aasb 3 Business Combinations). (g) deferred acquisition costs, and Intangible Assets , arising from an insurer s contractual rights under insurance contracts within the scope of aasb 4 Insurance Contracts. aasb 4 sets out specific disclosure requirements for those deferred acquisition costs but not for those Intangible Assets . Therefore, the disclosure requirements in this Standard apply to those Intangible Assets . (h) non-current Intangible Assets classified as held for sale (or included in a disposal group that is classified as held for sale) in accordance with aasb 5 Non-current Assets Held for Sale and Discontinued Operations.

10 (i) Assets arising from contracts with customers that are recognised in accordance with aasb 15 Revenue from Contracts with Customers. This Standard does not apply to Intangible Assets recognised as service concession Assets in accordance with aasb 1059 Service Concession Arrangements: Grantors, except as set out in that Standard. Authorised Version F2021C00883 registered 03/09/2021 aasb 138- compiled 7 STANDARD 4 Some Intangible Assets may be contained in or on a physical substance such as a compact disc (in the case of computer software), legal documentation (in the case of a licence or patent) or film. In determining whether an asset that incorporates both Intangible and tangible elements should be treated under aasb 116 Property, Plant and Equipment or as an Intangible asset under this Standard, an entity uses judgement to assess which element is more significant.