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

Tarang Retail Ltd develops its own web site, which customers use to browse and order goods. Under the Ind AS 38 web site cost guidance (Appendix A), how is such an entity's own web site that arises from development and is for internal or external access treated?

An entity's own web site arising from development, whether for internal or external access, is an internally generated intangible asset. It is therefore subject to the requirements of Ind AS 38. External customer access does not take it outside the standard.

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

Explanation

The Appendix states that an entity's own web site that arises from development and is 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 and lease treatment apply only to sites held for sale or accounted for under Ind AS 116.

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