ACCA IAS 38 Intangible Assets Notes by PW

IAS 38 Intangible Assets can be challenging when you need to distinguish between different types of intangible assets and understand when expenditure should be recognised as an asset or an expense. Concepts such as amortisation, research expenditure and development expenditure require careful revision.

The IAS 38 Intangible Assets ACCA PDF by PW covers key concepts including the introduction to intangible assets, amortisation, double-entry accounting, recognition, research and development, and disclosures. You can use the PDF to revise these areas, strengthen your understanding of IAS 38 and support your ACCA Financial Accounting preparation. 

Recognition of Intangible Assets

Purchased intangible assets that meet the recognition requirements can be recognised and included in the statement of financial position. However, certain internally generated items, such as internally generated brands and goodwill, are not recognised as intangible assets.

Once an intangible asset with a finite useful life is recognised, its depreciable amount is allocated systematically over its useful life through amortisation.

Amortisation of Intangible Assets

Amortisation reflects the consumption of the economic benefits associated with an intangible asset. It begins when the asset is available for use and ends when the asset is derecognised or classified as held for sale, as applicable.

The amortisation method should reflect the pattern in which the asset's economic benefits are consumed. When that pattern cannot be determined reliably, the straight-line method is used.

Factors that can help determine useful life include expected usage, product life cycles, technological obsolescence, market demand, competition and the period for which the asset is controlled.

The residual value of an intangible asset is generally assumed to be zero unless there is a third-party commitment to purchase the asset at the end of its useful life or an active market exists.

Double Entries for Intangible Assets

When an intangible asset is recognised, its cost is recorded in the statement of financial position.

For amortisation, the expense is recognised and accumulated amortisation reduces the carrying amount of the intangible asset.

Research and Development

Research and development are important areas of IAS 38 because internally generated intangible assets can be difficult to identify and measure reliably.

Research involves an original and planned investigation undertaken to gain new scientific or technical knowledge and understanding. Development involves applying research findings or other knowledge to a plan or design before commercial production or use.

For example, a pharmaceutical company may research the properties of herbs to identify a possible treatment and then use the findings to develop a medicine for commercial production.

Research expenditure is recognised as an expense. Development expenditure can be recognised as an intangible asset when the applicable recognition criteria are satisfied.

IAS 38 Intangible Assets ACCA PDF

The IAS 38 Intangible Assets ACCA PDF explains important areas such as the amortisation period, amortisation methods and the accounting treatment of research and development activities. It can be used as a revision resource while preparing for ACCA Financial Accounting.

Why Choose IAS 38 Intangible Assets ACCA PDF by PW?

IAS 38 covers several areas of intangible asset accounting, from recognition and amortisation to research and development. The resources below can help you revise these concepts alongside related Financial Accounting topics and strengthen your understanding of the standard. 

Revise IAS 38 Intangible Assets with PW's IAS 38 Intangible Assets 

The PDF helps you revise the meaning, recognition and treatment of intangible assets, including examples such as software, patents, licences, copyrights and trademarks. 

Strengthen Your Understanding of Amortisation with Amortization vs Depreciation

Revise how the cost of an intangible asset is allocated over its useful life through amortisation. Understanding the difference between amortisation and depreciation can help you distinguish the accounting treatment of intangible and tangible assets.

Connect IAS 38 with ACCA Financial Accounting (FA)

The PDF covers intangible assets as part of financial accounting, including recognition, amortisation and research and development. Revising these concepts alongside broader ACCA Financial Accounting topics can help you build a connected understanding of the syllabus.

Revise Intangible Assets Alongside the ACCA FA Syllabus 2026

The ACCA FA syllabus includes intangible non-current assets and amortisation under recording transactions and events. Use the PDF to revise IAS 38 concepts while covering the relevant area of the ACCA Financial Accounting syllabus.

The IAS 38 Intangible Assets ACCA PDF by PW brings together important concepts related to recognition, amortisation, double entries, research and development, and disclosures. Regular revision of these areas can help you strengthen your understanding of intangible assets for ACCA Financial Accounting.