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Intangible Assets

Ind AS - 038 - Rule - B. Indian Accounting Standards (Ind AS) - Companies Law - Ind AS - 038 - Indian Accounting Standard (Ind AS) 38 (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Objective 1 The objective of this Standard is to prescribe the accounting treatment for that are not dealt with specifically in another Standard. This Standard requires an entity to recognise an in .....

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al Resources); and (d) expenditure on the development and extraction of minerals, oil, natural gas and similar non-regenerative resources. 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: 1[(a) held by an entity for sale in the ordinary course of business (see Ind AS 2, Inventories, and Ind AS 11, Construction Contracts). ] (b) deferred tax assets (see I .....

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ess Combinations). (g) deferred acquisition costs, and , arising from an insurer s contractual rights under insurance contracts within the scope of Ind AS 104, Insurance Contracts. Ind AS 104 sets out specific disclosure requirements for those deferred acquisition costs but not for those . Therefore, the disclosure requirements in this Standard apply to those . (h) non-current classified as held for sale (or included in a disposal group that is classified as held for sale) in accordance with Ind .....

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ch element is more significant. For example, computer software for a computer-controlled machine tool that cannot operate without that specific software is an integral part of the related hardware and it is treated as property, plant and equipment. The same applies to the operating system of a computer. When the software is not an integral part of the related hardware, computer software is treated as an intangible asset. 5 This Standard applies to, among other things, expenditure on advertising, .....

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ngible asset held under a finance lease in accordance with this Standard. Rights under licensing agreements for items such as motion picture films, video recordings, plays, manuscripts, patents and copyrights are excluded from the scope of Ind AS 17, and are within the scope of this Standard. 7 Exclusions from the scope of a Standard may occur if activities or transactions are so specialised that they give rise to accounting issues that may need to be dealt with in a different way. Such issues a .....

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tandard does not apply to an entity that opts to amortise the arising from service concession arrangements in respect of toll roads recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS reporting period as per the exception given in paragraph D22 of Appendix D to Ind AS 101. Definitions 8 The following terms are used in this Standard with the meanings specified: Amortisation is the systematic allocation of the depreciable amount of an i .....

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of its acquisition or construction, or, when applicable, the amount attributed to that asset when initially recognised in accordance with the specific requirements of other Indian Accounting Standards, eg Ind AS 102, Share-based Payment. Depreciable amount is the cost of an asset, or other amount substituted for cost, less its residual value. Development is the application of research findings or other knowledge to a plan or design for the production of new or substantially improved materials, d .....

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e Ind AS 113, Fair Value Measurement.) An impairment loss is the amount by which the carrying amount of an asset exceeds its recoverable amount. An intangible asset is an identifiable non-monetary asset without physical substance. Monetary assets are money held and assets to be received in fixed or determinable amounts of money. Research is original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding. The residual value of an .....

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incur liabilities, on the acquisition, development, maintenance or enhancement of intangible resources such as scientific or technical knowledge, design and implementation of new processes or systems, licences, intellectual property, market knowledge and trademarks (including brand names and publishing titles). Common examples of items encompassed by these broad headings are computer software, patents, copyrights, motion picture films, customer lists, mortgage servicing rights, fishing licences, .....

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, if the item is acquired in a business combination, it forms part of the goodwill recognised at the acquisition date (see paragraph 68). Identifiability 11 The definition of an intangible asset requires an intangible asset to be identifiable to distinguish it from goodwill. Goodwill recognised in a business combination is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognised. .....

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so; or (b) arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from the entity or from other rights and obligations. Control 13 An entity controls an asset if the entity has the power to obtain the future economic benefits flowing from the underlying resource and to restrict the access of others to those benefits. The capacity of an entity to control the future economic benefits from an intangible asset would normally stem from legal r .....

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trade agreement (where permitted) or by a legal duty on employees to maintain confidentiality. 15 An entity may have a team of skilled staff and may be able to identify incremental staff skills leading to future economic benefits from training. The entity may also expect that the staff will continue to make their skills available to the entity. However, an entity usually has insufficient control over the expected future economic benefits arising from a team of skilled staff and from training for .....

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customers will continue to trade with the entity. However, in the absence of legal rights to protect, or other ways to control, the relationships with customers or the loyalty of the customers to the entity, the entity usually has insufficient control over the expected economic benefits from customer relationships and loyalty for such items (eg portfolio of customers, market shares, customer relationships and customer loyalty) to meet the definition of . In the absence of legal rights to protec .....

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ts 17 The future economic benefits flowing from an intangible asset may include revenue from the sale of products or services, cost savings, or other benefits resulting from the use of the asset by the entity. For example, the use of intellectual property in a production process may reduce future production costs rather than increase future revenues. Recognition and measurement 18 The recognition of an item as an intangible asset requires an entity to demonstrate that the item meets: (a) the def .....

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ith the initial measurement of acquired by way of a government grant, paragraphs 45-47 with exchanges of , and paragraphs 48-50 with the treatment of internally generated goodwill. Paragraphs 51-67 deal with the initial recognition and measurement of internally generated . 20 The nature of is such that, in many cases, there are no additions to such an asset or replacements of part of it. Accordingly, most subsequent expenditures are likely to maintain the expected future economic benefits embodi .....

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d in the carrying amount of an asset. Consistently with paragraph 63, subsequent expenditure on brands, mastheads, publishing titles, customer lists and items similar in substance (whether externally acquired or internally generated) is always recognised in profit or loss as incurred. This is because such expenditure cannot be distinguished from expenditure to develop the business as a whole. 21 An intangible asset shall be recognised if, and only if: (a) it is probable that the expected future .....

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are attributable to the use of the asset on the basis of the evidence available at the time of initial recognition, giving greater weight to external evidence. 24 An intangible asset shall be measured initially at cost. Separate acquisition 25 Normally, the price an entity pays to acquire separately an intangible asset will reflect expectations about the probability that the expected future economic benefits embodied in the asset will flow to the entity. In other words, the entity expects there .....

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sset comprises: (a) its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates; and (b) any directly attributable cost of preparing the asset for its intended use. 28 Examples of directly attributable costs are: (a) costs of employee benefits (as defined in Ind AS 19) arising directly from bringing the asset to its working condition; (b) professional fees arising directly from bringing the asset to its working condition; and (c) cos .....

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ceases when the asset is in the condition necessary for it to be capable of operating in the manner intended by management. Therefore, costs incurred in using or redeploying an intangible asset are not included in the carrying amount of that asset. For example, the following costs are not included in the carrying amount of an intangible asset: (a) costs incurred while an asset capable of operating in the manner intended by management has yet to be brought into use; and (b) initial operating los .....

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perating in the manner intended by management, the income and related expenses of incidental operations are recognised immediately in profit or loss, and included in their respective classifications of income and expense. 32 If payment for an intangible asset is deferred beyond normal credit terms, its cost is the cash price equivalent. The difference between this amount and the total payments is recognised as interest expense over the period of credit unless it is capitalised in accordance with .....

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words, the entity expects there to be an inflow of economic benefits, even if there is uncertainty about the timing or the amount of the inflow. Therefore, the probability recognition criterion in paragraph 21(a) is always considered to be satisfied for acquired in business combinations. If an asset acquired in a business combination is separable or arises from contractual or other legal rights, sufficient information exists to measure reliably the fair value of the asset. Thus, the reliable mea .....

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ect of the acquiree if the project meets the definition of an intangible asset. An acquiree s in-process research and development project meets the definition of an intangible asset when it: (a) meets the definition of an asset; and (b) is identifiable, ie is separable or arises from contractual or other legal rights. Intangible asset acquired in a business combination 35 If an intangible asset acquired in a business combination is separable or arises from contractual or other legal rights, suff .....

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t separately from goodwill, but together with the related item. 37 The acquirer may recognise a group of complementary as a single asset provided the individual assets have similar useful lives. For example, the terms brand and brand name are often used as synonym for trademarks and other marks. However, the former are general marketing terms that are typically used to refer to a group of complimentary assets such as a trademark (or service mark) and its related trade name, formulas, recipes and .....

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s that subsequent expenditure on an in-process research or development project acquired separately or in a business combination and recognised as an intangible asset is: (a) recognised as an expense when incurred if it is research expenditure; (b) recognised as an expense when incurred if it is development expenditure that does not satisfy the criteria for recognition as an intangible asset in paragraph 57; and (c) added to the carrying amount of the acquired in-process research or development p .....

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ordance with Ind AS 20, Accounting for Government Grants and Disclosure of Government Assistance, an entity recognises both the intangible asset and the grant initially at fair value. Exchanges of assets 45 One or more may be acquired in exchange for a non-monetary asset or assets, or a combination of monetary and non-monetary assets. The following discussion refers simply to an exchange of one non-monetary asset for another, but it also applies to all exchanges described in the preceding senten .....

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ange transaction has commercial substance by considering the extent to which its future cash flows are expected to change as a result of the transaction. An exchange transaction has commercial substance if: (a) the configuration (ie risk, timing and amount) of the cash flows of the asset received differs from the configuration of the cash flows of the asset transferred; or (b) the entity-specific value of the portion of the entity s operations affected by the transaction changes as a result of t .....

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ion of an intangible asset is that the cost of the asset can be measured reliably. The fair value of an intangible asset is reliably measurable if (a) the variability in the range of reasonable fair value measurements is not significant for that asset or (b) the probabilities of the various estimates within the range can be reasonably assessed and used when measuring fair value. If an entity is able to measure reliably the fair value of either the asset received or the asset given up, then the f .....

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dwill. Internally generated goodwill is not recognised as an asset because it is not an identifiable resource (ie it is not separable nor does it arise from contractual or other legal rights) controlled by the entity that can be measured reliably at cost. 50 Differences between the fair value of an entity and the carrying amount of its identifiable net assets at any time may capture a range of factors that affect the fair value of the entity. However, such differences do not represent the cost o .....

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ty s internally generated goodwill or of running day-to-day operations. Therefore, in addition to complying with the general requirements for the recognition and initial measurement of an intangible asset, an entity applies the requirements and guidance in paragraphs 52-67 to all internally generated . 52 To assess whether an internally generated intangible asset meets the criteria for recognition, an entity classifies the generation of the asset into: (a) a research phase; and (b) a development .....

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nternal project) shall be recognised. Expenditure on research (or on the research phase of an internal project) shall be recognised as an expense when it is incurred. 55 In the research phase of an internal project, an entity cannot demonstrate that an intangible asset exists that will generate probable future economic benefits. Therefore, this expenditure is recognised as an expense when it is incurred. 56 Examples of research activities are: (a) activities aimed at obtaining new knowledge; (b) .....

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l be recognised if, and only if, an entity can demonstrate all of the following: (a) the technical feasibility of completing the intangible asset so that it will be available for use or sale. (b) its intention to complete the intangible asset and use or sell it. (c) its ability to use or sell the intangible asset. (d) how the intangible asset will generate probable future economic benefits. Among other things, the entity can demonstrate the existence of a market for the output of the intangible .....

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that the asset will generate probable future economic benefits. This is because the development phase of a project is further advanced than the research phase. 59 Examples of development activities are: (a) the design, construction and testing of pre-production or pre-use prototypes and models; (b) the design of tools, jigs, moulds and dies involving new technology; (c) the design, construction and operation of a pilot plant that is not of a scale economically feasible for commercial production; .....

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-generating units in Ind AS 36. 61 Availability of resources to complete, use and obtain the benefits from an intangible asset can be demonstrated by, for example, a business plan showing the technical, financial and other resources needed and the entity s ability to secure those resources. In some cases, an entity demonstrates the availability of external finance by obtaining a lender s indication of its willingness to fund the plan. 62 An entity s costing systems can often measure reliably the .....

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e. Therefore, such items are not recognised as . Cost of an internally generated intangible asset 65 The cost of an internally generated intangible asset for the purpose of paragraph 24 is the sum of expenditure incurred from the date when the intangible asset first meets the recognition criteria in paragraphs 21, 22 and 57. Paragraph 71 prohibits reinstatement of expenditure previously recognised as an expense. 66 The cost of an internally generated intangible asset comprises all directly attri .....

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et. Ind AS 23 specifies criteria for the recognition of interest as an element of the cost of an internally generated intangible asset. 67 The following are not components of the cost of an internally generated intangible asset: (a) selling, administrative and other general overhead expenditure unless this expenditure can be directly attributed to preparing the asset for use; (b) identified inefficiencies and initial operating losses incurred before the asset achieves planned performance; and (c .....

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w embodied in the process (including future cash outflows to complete the process before it is available for use) is estimated to be ₹ 500. At the end of 20X5, the production process is recognised as an intangible asset at a cost of ₹ 100 (expenditure incurred since the date when the recognition criteria were met, ie 1 December 20X5). The ₹ 900 expenditure incurred before 1 December 20X5 is recognised as an expense because the recognition criteria were not met until 1 December .....

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377; 2,000 expenditure recognised in 20X6). The entity recognises an impairment loss of ₹ 200 to adjust the carrying amount of the process before impairment loss (Rs.2,100) to its recoverable amount (Rs.1,900). This impairment loss will be reversed in a subsequent period if the requirements for the reversal of an impairment loss in Ind AS 36 are met. Recognition of an expense 68 Expenditure on an intangible item shall be recognised as an expense when it is incurred unless: (a) it forms par .....

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ase of the supply of goods, the entity recognises such expenditure as an expense when it has a right to access those goods. In the case of the supply of services, the entity recognises the expenditure as an expense when it receives the services. For example, expenditure on research is recognised as an expense when it is incurred (see paragraph 54), except when it is acquired as part of a business combination. Other examples of expenditure that is recognised as an expense when it is incurred incl .....

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enditure on training activities. (c) expenditure on advertising and promotional activities (including mail order catalogues). (d) expenditure on relocating or reorganising part or all of an entity. 69A An entity has a right to access goods when it owns them. Similarly, it has a right to access goods when they have been constructed by a supplier in accordance with the terms of a supply contract and the entity could demand delivery of them in return for payment. Services are received when they are .....

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r services has been made in advance of the entity receiving those services. Past expenses not to be recognised as an asset 71 Expenditure on an intangible item that was initially recognised as an expense shall not be recognised as part of the cost of an intangible asset at a later date. Measurement after recognition 72 An entity shall choose either the cost model in paragraph 74 or the revaluation model in paragraph 75 as its accounting policy. If an intangible asset is accounted for using the r .....

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ition, an intangible asset shall be carried at its cost less any accumulated amortisation and any accumulated impairment losses. Revaluation model 75 After initial recognition, an intangible asset shall be carried at a revalued amount, being its fair value at the date of the revaluation less any subsequent accumulated amortisation and any subsequent accumulated impairment losses. For the purpose of revaluations under this Standard, fair value shall be measured by reference to an active market. R .....

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gnised as an asset because the asset did not meet the criteria for recognition until part of the way through the process (see paragraph 65), the revaluation model may be applied to the whole of that asset. 78 It is uncommon for an active market to exist for an intangible asset, although this may happen. For example, in some jurisdictions, an active market may exist for freely transferable taxi licences, fishing licences or production quotas. However, an active market cannot exist for brands, new .....

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s of the being revalued. If the fair value of a revalued asset differs materially from its carrying amount, a further revaluation is necessary. Some may experience significant and volatile movements in fair value, thus necessitating annual revaluation. Such frequent revaluations are unnecessary for with only insignificant movements in fair value. 80 When an intangible asset is revalued, the carrying amount of that asset is adjusted to the revalued amount. At the date of the revaluation, the asse .....

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the asset after taking into account accumulated impairment losses; or (b) the accumulated amortisation is eliminated against the gross carrying amount of the asset. The amount of the adjustment of accumulated amortisation forms part of the increase or decrease in the carrying amount that is accounted for in accordance with paragraphs 85 and 86. 81 If an intangible asset in a class of revalued cannot be revalued because there is no active market for this asset, the asset shall be carried at its .....

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t the asset may be impaired and that it needs to be tested in accordance with Ind AS 36. 84 If the fair value of the asset can be measured by reference to an active market at a subsequent measurement date, the revaluation model is applied from that date. 85 If an intangible asset s carrying amount is increased as a result of a revaluation, the increase shall be recognised in other comprehensive income and accumulated in equity under the heading of revaluation surplus. However, the increase shall .....

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reduces the amount accumulated in equity under the heading of revaluation surplus. 87 The cumulative revaluation surplus included in equity may be transferred directly to retained earnings when the surplus is realised. The whole surplus may be realised on the retirement or disposal of the asset. However, some of the surplus may be realised as the asset is used by the entity; in such a case, the amount of the surplus realised is the difference between amortisation based on the revalued carrying a .....

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e when, based on an analysis of all of the relevant factors, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflows for the entity. 89 The accounting for an intangible asset is based on its useful life. An intangible asset with a finite useful life is amortised (see paragraphs 97-106), and an intangible asset with an indefinite useful life is not (see paragraphs 107-110). 90 Many factors are considered in determining the useful life of an intang .....

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put from the asset; (e) expected actions by competitors or potential competitors; (f) the level of maintenance expenditure required to obtain the expected future economic benefits from the asset and the entity s ability and intention to reach such a level; (g) the period of control over the asset and legal or similar limits on the use of the asset, such as the expiry dates of related leases; and (h) whether the useful life of the asset is dependent on the useful life of other assets of the entit .....

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at that standard of performance. 92 Given the history of rapid changes in technology, computer software and many other are susceptible to technological obsolescence. Therefore, it will often be the case that their useful life is short. Expected future reductions in the selling price of an item that was produced using an intangible asset could indicate the expectation of technological or commercial obsolescence of the asset, which, in turn, might reflect a reduction of the future economic benefi .....

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cts to use the asset. If the contractual or other legal rights are conveyed for a limited term that can be renewed, the useful life of the intangible asset shall include the renewal period(s) only if there is evidence to support renewal by the entity without significant cost. The useful life of a reacquired right recognised as an intangible asset in a business combination is the remaining contractual period of the contract in which the right was granted and shall not include renewal periods. 95 .....

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egal rights without significant cost: (a) there is evidence, possibly based on experience, that the contractual or other legal rights will be renewed. If renewal is contingent upon the consent of a third party, this includes evidence that the third party will give its consent; (b) there is evidence that any conditions necessary to obtain renewal will be satisfied; and (c) the cost to the entity of renewal is not significant when compared with the future economic benefits expected to flow to the .....

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asset is available for use, ie when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. Amortisation shall cease at the earlier of the date that the asset is classified as held for sale (or included in a disposal group that is classified as held for sale) in accordance with Ind AS 105 and the date that the asset is derecognised. The amortisation method used shall reflect the pattern in which the asset s future economic benefits ar .....

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hod, the diminishing balance method and the units of production method. The method used is selected on the basis of the expected pattern of consumption of the expected future economic benefits embodied in the asset and is applied consistently from period to period, unless there is a change in the expected pattern of consumption of those future economic benefits. 98A There is a rebuttable presumption that an amortisation method that is based on the revenue generated by an activity that includes t .....

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is consumed. This presumption can be overcome only in the limited circumstances: (a) in which the intangible asset is expressed as a measure of revenue, as described in paragraph 98C; or (b) when it can be demonstrated that revenue and the consumption of the economic benefits of the intangible asset are highly correlated. 98B In choosing an appropriate amortisation method in accordance with paragraph 98, an entity could determine the predominant limiting factor that is inherent in the intangibl .....

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lects the expected pattern of consumption of economic benefits. 98C In the circumstance in which the predominant limiting factor that is inherent in an intangible asset is the achievement of a revenue threshold, the revenue to be generated can be an appropriate basis for amortisation. For example, an entity could acquire a concession to explore and extract gold from a gold mine. The expiry of the contract might be based on a fixed amount of total revenue to be generated from the extraction (for .....

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₹ 100 million). In the case in which revenue has been established as the predominant limiting factor in the contract for the use of the intangible asset, the revenue that is to be generated might be an appropriate basis for amortising the intangible asset, provided that the contract specifies a fixed total amount of revenue to be generated on which amortisation is to be determined. 99 Amortisation is usually recognised in profit or loss. However, sometimes the future economic benefits embo .....

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e the asset at the end of its useful life; or (b) there is an active market (as defined in Ind AS 113) for the asset and: (i) residual value can be determined by reference to that market; and (ii) it is probable that such a market will exist at the end of the asset s useful life. 101 The depreciable amount of an asset with a finite useful life is determined after deducting its residual value. A residual value other than zero implies that an entity expects to dispose of the intangible asset befor .....

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in accordance with Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors. 103 The residual value of an intangible asset may increase to an amount equal to or greater than the asset s carrying amount. If it does, the asset s amortisation charge is zero unless and until its residual value subsequently decreases to an amount below the asset s carrying amount. Review of amortisation period and amortisation method 104 The amortisation period and the amortisation method for an inta .....

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dance with Ind AS 8. 105 During the life of an intangible asset, it may become apparent that the estimate of its useful life is inappropriate. For example, the recognition of an impairment loss may indicate that the amortisation period needs to be changed. 106 Over time, the pattern of future economic benefits expected to flow to an entity from an intangible asset may change. For example, it may become apparent that a diminishing balance method of amortisation is appropriate rather than a straig .....

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ng its recoverable amount with its carrying amount (a) annually, and (b) whenever there is an indication that the intangible asset may be impaired. Review of useful life assessment 109 The useful life of an intangible asset that is not being amortised shall be reviewed each period to determine whether events and circumstances continue to support an indefinite useful life assessment for that asset. If they do not, the change in the useful life assessment from indefinite to finite shall be account .....

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Recoverability of the carrying amount-impairment losses 111 To determine whether an intangible asset is impaired, an entity applies Ind AS 36. That Standard explains when and how an entity reviews the carrying amount of its assets, how it determines the recoverable amount of an asset and when it recognises or reverses an impairment loss. Retirements and disposals 112 An intangible asset shall be derecognised: (a) on disposal; or (b) when no future economic benefits are expected from its use or d .....

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or by donation). In determining the date of disposal of such an asset, an entity applies the criteria in Ind AS 18, Revenue, for recognising revenue from the sale of goods. Ind AS 17 applies to disposal by a sale and leaseback. ] 115 If in accordance with the recognition principle in paragraph 21 an entity recognises in the carrying amount of an asset the cost of a replacement for part of an intangible asset, then it derecognises the carrying amount of the replaced part. If it is not practicabl .....

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intangible asset is recognised initially at its fair value. If payment for the intangible asset is deferred, the consideration received is recognised initially at the cash price equivalent. The difference between the nominal amount of the consideration and the cash price equivalent is recognised as interest revenue in accordance with Ind AS 18 reflecting the effective yield on the receivable. ] 117 Amortisation of an intangible asset with a finite useful life does not cease when the intangible a .....

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th finite useful lives; (c) the gross carrying amount and any accumulated amortisation (aggregated with accumulated impairment losses) at the beginning and end of the period; (d) the line item(s) of the statement of profit and loss in which any amortisation of is included; (e) a reconciliation of the carrying amount at the beginning and end of the period showing: (i) additions, indicating separately those from internal development, those acquired separately, and those acquired through business c .....

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) impairment losses reversed in profit or loss during the period in accordance with Ind AS 36 (if any); (vi) any amortisation recognised during the period; (vii) net exchange differences arising on the translation of the financial statements into the presentation currency, and on the translation of a foreign operation into the presentation currency of the entity; and (viii) other changes in the carrying amount during the period. 119 A class of is a grouping of assets of a similar nature and use .....

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the financial statements. 120 An entity discloses information on impaired in accordance with Ind AS 36 in addition to the information required by paragraph 118(e)(iii)-(v). 121 Ind AS 8 requires an entity to disclose the nature and amount of a change in an accounting estimate that has a material effect in the current period or is expected to have a material effect in subsequent periods. Such disclosure may arise from changes in: (a) the assessment of an intangible asset s useful life; (b) the am .....

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idual intangible asset that is material to the entity s financial statements. (c) for acquired by way of a government grant and initially recognised at fair value (see paragraph 44): (i) the fair value initially recognised for these assets; (ii) their carrying amount; and (iii) whether they are measured after recognition under the cost model or the revaluation model. (d) the existence and carrying amounts of whose title is restricted and the carrying amounts of pledged as security for liabilitie .....

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t of revalued ; and (iii) the carrying amount that would have been recognised had the revalued class of been measured after recognition using the cost model in paragraph 74;and b. the amount of the revaluation surplus that relates to at the beginning and end of the period, indicating the changes during the period and any restrictions on the distribution of the balance to shareholders. c. [Refer Appendix 1] 125 It may be necessary to aggregate the classes of revalued assets into larger classes fo .....

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aragraphs 66 and 67 for guidance on the type of expenditure to be included for the purpose of the disclosure requirement in paragraph 126). Other information 128 An entity is encouraged, but not required, to disclose the following information: (a) a description of any fully amortised intangible asset that is still in use; and (b) a brief description of significant controlled by the entity but not recognised as assets because they did not meet the recognition criteria in this Standard or because .....

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gned for internal access may be used to store company policies and customer details, and search relevant information. 2 The stages of a web site s development can be described as follows: (a) Planning - includes undertaking feasibility studies, defining objectives and specifications, evaluating alternatives and selecting preferences. (b) Application and Infrastructure Development - includes obtaining a domain name, purchasing and developing hardware and operating software, installing developed a .....

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site has been completed, the Operating stage begins. During this stage, an entity maintains and enhances the applications, infrastructure, graphical design and content of the web site. 4 When accounting for internal expenditure on the development and operation of an entity s own web site for internal or external access, the issues are: (a) whether the web site is an internally generated intangible asset that is subject to the requirements of Ind AS 38; and (b) the appropriate accounting treatmen .....

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tion of Financial Statements in accordance with Indian Accounting Standards issued by The Institute of Chartered Accountants of India when the services are received. 5[ 6 Ind AS 38 does not apply to held by an entity for sale in the ordinary course of business (see Ind AS 2 and Ind AS 11) or leases that fall within the scope of Ind AS 17. Accordingly, this Appendix does not apply to expenditure on the development or operation of a web site (or web site software) for sale to another entity. When .....

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set if, and only if, in addition to complying with the general requirements described in paragraph 21 of Ind AS 38 for recognition and initial measurement, an entity can satisfy the requirements in paragraph 57 of Ind AS 38. In particular, an entity may be able to satisfy the requirement to demonstrate how its web site will generate probable future economic benefits in accordance with paragraph 57 (d) of Ind AS 38 when, for example, the web site is capable of generating revenues, including direc .....

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of each activity for which expenditure is incurred (eg training employees and maintaining the web site) and the web site s stage of development or post-development shall be evaluated to determine the appropriate accounting treatment. For example: (a) the Planning stage is similar in nature to the research phase in paragraphs 54-56 of Ind AS 38. Expenditure incurred in this stage shall be recognised as an expense when it is incurred. (b) the Application and Infrastructure Development stage, the .....

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eating, producing or preparing the web site for it to be capable of operating in the manner intended by management. For example, expenditure on purchasing or creating content (other than content that advertises and promotes an entity s own products and services) specifically for a web site, or expenditure to enable use of the content (eg a fee for acquiring a licence to reproduce) on the web site, shall be included in the cost of development when this condition is met. However, in accordance wit .....

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(eg digital photographs of products), shall be recognised as an expense when incurred in accordance with paragraph 69(c) of Ind AS 38. For example, when accounting for expenditure on professional services for taking digital photographs of an entity s own products and for enhancing their display, expenditure shall be recognised as an expense as the professional services are received during the process, not when the digital photographs are displayed on the web site. (d) the Operating stage begins .....

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ontained in other Indian Accounting Standards This appendix is an integral part of the Ind AS. This appendix lists the appendices which are part of other Indian Accounting Standards and make reference to Ind AS 38, . 6[ 1 Appendix A, Service Concession Arrangements contained in Ind AS 11, Construction Contracts. ] 7[ 2 Appendix B, Service Concession Arrangements: Disclosures contained in Ind AS 11, Construction Contracts. ] 3. Appendix C, Determining whether an Arrangement contains a Lease, cont .....

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Standards Board. Comparison with IAS 38, and SIC 32 1 With regard to the acquisition of an intangible asset by way of a government grant, IAS 38, , provides the option to an entity to recognise both asset and grant initially at fair value or at a nominal amount plus any expenditure that is directly attributable to preparing the asset for its intended use. Ind AS 38 allows only fair value for recognising the intangible asset and grant in accordance with Ind AS 20. 2 The transitional provisions g .....

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ment of comprehensive income . 4 Paragraph 7AA has been inserted to scope out the entity that opts to amortise the arising from service concession arrangements in respect of toll roads recognised in the financial statements for the period ending immediately before the beginning of the first Ind AS reporting period as per the exception given in paragraph D22 of Appendix D to Ind AS 101. 5 Following Paragraph numbers appear as Deleted in IAS 38. In order to maintain consistency with paragraph numb .....

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nal guidance provided in examples. - Notes:- 1. Substituted vide F. No. 01/01/2009-CL-V(Part) - Dated 30-3-2016 before it was read as, " (a) held by an entity for sale in the ordinary course of business (see Ind AS 2, Inventories). " 2. Omitted vide F. No. 01/01/2009-CL-V(Part) - Dated 30-3-2016 before it was read as, " (i) assets arising from contracts with customers that are recognised in accordance with Ind AS 115, Revenue from Contracts with Customers. " 3. Substituted vi .....

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