ACCOUNTING FOR INTANGIBLE ASSETS UNDER IAS 38

Abstract

The article considers the economic meaning and classification of intangible assets under International Accounting Standard 38 «Intangible Assets». The paper states that the international standard contains information regarding groups of intangible assets being available for modification and supplementation by an entity. An author has identified conditions for recognizing intangible assets on balance. Ownership rights for each group of identifiable intangible assets are approved by specific documents, which are classified and grouped in a table. The paper summarizes ways of acquisition and disposal of intangible assets. The aim of the article refers to identifying economic meaning of intangible assets in entity`s business activity, as well as to researching procedures for identification, classification, measurement and recognition of intangible assets under IFRS 38 «Intangible Assets». The author has applied general methods of research. Analysis is used to consider groups of intangible assets. Synthesis is applied to aggregate measurement techniques for intangible assets. Analysis of legal provision for accounting under international financial reporting standards enables to disclose procedures for the intangible assets revaluation. Intangible assets should be revaluated in terms of availability of an active market for similar assets. However, it is uncommon for an active market to exist for trademarks, mastheads, music and film copyrights, and patents, because each such asset is unique. If there is no active market for particular intangible assets, such assets are measured at cost. Applied value refers to disclosing procedures for cost calculation of intangible assets on the date of recognition without expenses, which are not components of cost. An illustrative example has enabled to explain procedures for revaluation of a computer program under a method of proportional revaluation and a write-off method. The author has stated that intangible assets with finite useful life are subjects to depreciation, while those with indefinite useful life are not depreciable. The paper discloses the economic meaning of a title document notion applied in estimating the useful life of an intangible asset.