Skip to content

CA Final · Financial Reporting · Ind AS 38 Intangible Assets

Sagar Softech Ltd builds software that it sells to customers in the ordinary course of its business, and it also builds software for its own internal use. Which statement is correct as per Ind AS 38?

Intangible assets held for sale in the ordinary course of business are excluded from Ind AS 38 and are dealt with under Ind AS 2 and Ind AS 115. Software developed for the entity's own use is an intangible asset covered by Ind AS 38.

  1. ASoftware held for sale in the ordinary course is outside Ind AS 38, which is dealt with by Ind AS 2 and Ind AS 115; software for own use falls within Ind AS 38Correct
  2. BBoth categories of software are accounted for under Ind AS 38 as intangible assets
  3. CBoth categories are outside Ind AS 38 and are accounted for under Ind AS 2
  4. DSoftware for own use is outside Ind AS 38, whereas software for sale is an intangible asset

Explanation

Ind AS 38 does not apply to intangible assets held for sale in the ordinary course of business, which are covered by Ind AS 2 and Ind AS 115. Software built for the entity's own use is an intangible asset within Ind AS 38. The other options reverse or merge the two treatments.

Did you get it right without looking?

One question tells you little. A timed set on Ind AS 38 Intangible Assets shows your real accuracy, how long you take and where you lose marks.

Practise Ind AS 38 Intangible AssetsFree diagnostic mock

More Ind AS 38 Intangible Assets questions