CMA Final · Corporate Financial Reporting · Intangible Assets (Ind AS 38)
Ganga Digital Ltd builds software purely to sell copies to other entities in the ordinary course of its business. How does Ind AS 38 treat these software products?
Ind AS 38 does not apply to intangible assets held for sale in the ordinary course of business. Such items are dealt with under Ind AS 2 and Ind AS 115 instead, so Ind AS 38 amortisation does not apply.
- AInd AS 38 does not apply; they are accounted for under Ind AS 2 or Ind AS 115 as applicableCorrect
- BThey are intangible assets under Ind AS 38 and amortised
- CThey are tested annually under Ind AS 38 as indefinite life assets
- DThey are capitalised as PPE under Ind AS 16
Explanation
Ind AS 38 does not apply to intangible assets held for sale in the ordinary course of business, which fall under Ind AS 2 and Ind AS 115. So the amortisation and capitalisation rules of Ind AS 38 are not used for them.
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