I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

F 

Preparing basic financial statements 

 

 

 

3 Disclosure 

notes 

 

 

 

(b)  Draft the following disclosure notes. 

(i)  Non-current assets including tangible and intangible   

    assets 

S 

 

 

 

 

 

 

 

 

1

   Intangible assets 

Intangible assets are non-current assets with no physical substance. 

1.1 Intangible assets 

'Intangible assets' means assets that literally cannot be touched, as opposed to tangible assets (such as 

plant and machinery) which have a physical existence. Intangible assets include goodwill (which we will 

meet in Chapter 24 on consolidated financial statements), intellectual rights (eg patents, performing 

rights and authorship rights), and research and development costs. 

1.2 Accounting treatment 

In accordance with IAS 38 Intangible Assets, intangible assets are capitalised in the accounts and 

amortised (another word for depreciation but referring specifically to intangible assets). Amortisation is 

intended to write off the asset over its useful life (under the accruals concept).