Intangible asset in Business

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Intangible asset:

An identifiable, non-monetary asset without physical substance’ An asset: A resource controlled by the company as a result of past events and from which future economic benefits are expected to flow

Recognition and initial measurement

An intangible asset must be measure at cost when first recognised.

An intangible asset is recognised when it:  complies with the definition of an intangible asset; and

,  meets the recognition criteria set out in the standard. An intangible asset must be recognised if (and only if)

:  it is probable that future economic benefits specifically attributable to the asset will flow to the company;

 the cost of the asset can be measured reliably;

 If it can be identified separately; and  If organization currently control the Intangible Non-Current Asset.

Subsequent expenditure on intangible assets Subsequent expenditure is only capitalised if it can be measured and attributed to an asset and enhances the value of the asset

Means of acquiring intangible assets A company might obtain control over an intangible resource in a number of ways. Intangible assets might be:

 purchased separately;

 acquired in exchange for another asset;

 given to a company by way of a government grant.

 internally generated; or  acquired in a business combination.

IAS 38 provides extra guidance on how the recognition criteria are to be applied and/or how the asset is to be measured in each circumstance