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

Under Ind AS 38 (as read with the Web Site Costs appendix), Kaveri Retail Ltd develops its own web site, which customers and staff will access. How is the web site 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. It is not automatically expensed, not property, plant and equipment, and not inventory.

  1. AAs an internally generated intangible asset subject to the requirements of Ind AS 38Correct
  2. BAs an item outside Ind AS 38 that is always expensed when incurred
  3. CAs property, plant and equipment under Ind AS 16
  4. DAs inventory under Ind AS 2 because it is accessed by customers

Explanation

The appendix states that an entity's own web site arising from development, whether for internal or external access, is an internally generated intangible asset subject to Ind AS 38. It is therefore not automatically expensed, and it is not PPE or inventory. Accordingly, the Ind AS 38 recognition criteria apply.

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