Aasb 138 Essay

1522 Words4 Pages

1. Main features of AASB 138 ‘intangible assets’. How Pics Ltd should account its intangible assets.
The Australian Accounting Standard Board 138 (AASB 138) defines and prescribes the recognition, measurement and disclosure of ‘intangibles assets’ not specifically covered by another standard.
AASB 138 defines an intangible asset as ‘an identifiable non-monetary asset without physical substance’. Some examples intangible assets are patents, computer software, licenses, trademarks or brand names, customer lists, patents and copyrights.
An item must meet the following criteria to be defined as an intangible asset:
a) Identifiability: an ‘intangible asset requires being identifiable to distinguish it from goodwill’.
To be identifiable, an asset must be either
i. Separable ii. Arises from contractual or other legal rights’
A separable asset can be separated or divided from the entity to be sold or …show more content…

b) Control over a resource refers to the power of the entity to obtain the future economic benefits and restrict the access of others to the intangible asset.
By having the legal rights of an asset and entity can easier demonstrate the control of the asset but in some cases is not the control of the asset required, is the control of the future benefits that must be proved. KPMG (2009) considers that in absence of legal rights, exchange transactions of the same (outside of business combination) or similar intangible assets provides de evidence of control.
c) Existence of future economic benefits, it must be probable that the asset will produce future benefits the company such as ‘revenue for the sale of products or services, cost savings’ among

Open Document