ACCA Applied Knowledge · Financial Accounting · Intangible non-current assets and amortisation
Which of the following internally generated items may be recognised as an intangible non-current asset under IAS 38?
Development costs that meet all the IAS 38 recognition criteria, such as technical feasibility and probable future benefits, must be capitalised. Research costs, internally generated brands and customer lists cannot be recognised and are expensed as incurred.
- ADevelopment costs meeting all the capitalisation criteriaCorrect
- BInternally generated brand name
- CCustomer lists built up by the entity
- DResearch costs on a new product
Explanation
IAS 38 requires development expenditure to be capitalised once criteria such as technical feasibility, intention and ability to complete, and probable future economic benefits are met. Research costs, internally generated brands and customer lists must be expensed.
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