Acca financial Accounting (FA) Study Text ac ca (FA)

Chapter 9 

KAPLAN PUBLISHING

 

163 

The basic principle of recognition of an intangible asset in the financial 

statements is that 

'the asset meets

  

•

 

the definition of an intangible asset, and

 

•

 

the recognition criteria'

 (IAS 38, para 18). 

As with any asset, it should be capable of reliable measurement and it is 

probable that future economic benefits will be received over the useful life of the 

asset. 

Development costs are internally generated intangible assets which are 

capitalised provided that specified criteria have been complied with. They are 

considered elsewhere within this chapter. 

Assets 

 

 

 

---

 

Intangible assets 

164

 

KAPLAN PUBLISHING

 

 

Test your understanding 1 

 

Willis Ltd purchased a patent, with a useful life of ten years for $20,000 

on 1 January 20X9. 

Prepare extracts of the financial statements for the year ended 

31 December 20X9?