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CA Final · Financial Reporting · Ind AS 38 Intangible Assets

Arjun Software Ltd. built its own web site, which customers use for external access and which staff use internally. The site arose from development by the company. How should Arjun treat the site under Ind AS 38 and its Appendix on web site costs?

The web site is an internally generated intangible asset subject to Ind AS 38. The Appendix on web site costs says an entity's own web site that arises from development and is for internal or external access falls within the standard, whichever audience uses it.

  1. AAs an internally generated intangible asset subject to the requirements of Ind AS 38Correct
  2. BAs an item outside Ind AS 38, expensed under a separate standard
  3. CAs a tangible asset under Ind AS 16 because it is accessible online
  4. DAs an intangible asset only if it is accessed solely for internal purposes

Explanation

The Appendix states that an entity's own web site arising from development, and meant for internal or external access, is an internally generated intangible asset subject to Ind AS 38. The mode of access does not change this. The internal-only option wrongly restricts the rule, because external access is also covered.

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