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CMA Final · Corporate Financial Reporting · Intangible Assets (Ind AS 38)

Bharat Retail Ltd develops its own web site, which customers can access to place orders online. Under the Ind AS 38 Appendix on Web Site Costs, how should the web site arising from development be treated?

An entity's own web site that arises from development, whether for internal or external access, is an internally generated intangible asset subject to Ind AS 38. Customer access does not take it out of the standard, so it is not inventory or a lease.

  1. AAs an internally generated intangible asset subject to the requirements of Ind AS 38Correct
  2. BAs an item outside Ind AS 38 because it is accessed by external parties
  3. CAs inventory held for sale under Ind AS 2
  4. DAs a lease of an intangible asset under Ind AS 116

Explanation

The Appendix states that an entity's own web site arising from development, for internal or external access, is an internally generated intangible asset subject to Ind AS 38. External access does not remove it from scope. Inventory treatment applies only to assets held for sale in the ordinary course of business.

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