Ias 38 – 2021 Issued ifrs standards (Part A)

71
72
73
74
75
76
77
IAS 38
A1506
© IFRS Foundation

---

It is uncommon for an active market to exist for an intangible asset, although
this may happen. For example, in some jurisdictions, an active market may
exist for freely transferable taxi licences, fishing licences or production
quotas. However, an active market cannot exist for brands, newspaper
mastheads, music and film publishing rights, patents or trademarks, because
each such asset is unique. Also, although intangible assets are bought and
sold, contracts are negotiated between individual buyers and sellers, and
transactions are relatively infrequent. For these reasons, the price paid for one
asset may not provide sufficient evidence of the fair value of another.
Moreover, prices are often not available to the public.
The frequency of revaluations depends on the volatility of the fair values of
the intangible assets being revalued. If the fair value of a revalued asset differs
materially from its carrying amount, a further revaluation is necessary. Some
intangible assets may experience significant and volatile movements in fair
value, thus necessitating annual revaluation. Such frequent revaluations are
unnecessary for intangible assets with only insignificant movements in fair
value.
When an intangible asset is revalued, the carrying amount of that asset is
adjusted to the revalued amount. At the date of the revaluation, the asset is
treated in one of the following ways:
(a)
the gross carrying amount is adjusted in a manner that is consistent
with the revaluation of the carrying amount of the asset. For example,
the gross carrying amount may be restated by reference to observable
market data or it may be restated proportionately to the change in the
carrying amount. The accumulated amortisation at the date of the
revaluation is adjusted to equal the difference between the gross
carrying amount and the carrying amount of the asset after taking into
account accumulated impairment losses; or
(b)
the accumulated amortisation is eliminated against the gross carrying
amount of the asset.
The amount of the adjustment of accumulated amortisation forms part of the
increase or decrease in the carrying amount that is accounted for in
accordance with paragraphs 85 and 86.