ACCA Applied Skills · Financial Reporting · Intangible assets
Which of the following is NOT one of the criteria that must be demonstrated before development expenditure is recognised as an intangible asset under IAS 38?
Expecting the asset to be revalued upwards each year is not a criterion. IAS 38 requires feasibility, intention, ability to use or sell, probable future benefits, adequate resources and reliable cost measurement, but says nothing about revaluation expectations.
- AThe entity's intention to complete the asset and use or sell it
- BThe ability to measure reliably the expenditure attributable to the asset
- CThe availability of adequate resources to complete the development
- DThe expectation that the asset will be revalued upwards each yearCorrect
Explanation
IAS 38 requires technical feasibility, intention and ability to complete and use or sell, probable future economic benefits, adequate resources, and reliable measurement of cost. There is no requirement for expected annual upward revaluation, so that option is not a criterion.
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