IAS 38 · Free study guide

    IAS 38: Intangible Assets

    IAS 38 sets out when intangible assets — like patents, licenses, and internally generated development costs — can be recognized on the balance sheet, and its research-vs-development distinction is one of the most commonly tested judgment calls in financial reporting exams.

    It's typically taught alongside IAS 16 as a companion standard on non-current assets, and it appears across professional qualification syllabi, staying relevant in practice for any company that invests in R&D, software, or acquired intangible rights.

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    Frequently asked questions

    What's the hardest part of IAS 38?

    Distinguishing research costs (expensed) from development costs (capitalized if criteria are met) — the criteria are specific and easy to misapply.

    Can internally generated brands be recognized under IAS 38?

    Generally no — the standard restricts recognition of certain internally generated intangibles, which is a common exam trap.

    Is IAS 38 tested alongside other standards?

    Often, yes — it's frequently combined with IAS 36 (impairment) and IFRS 3 (business combinations) in exam scenarios.

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