Recognition

In this lesson

1. 0:01 Intangible non-current assets overview
2. 0:29 Recognition definition and criteria
3. 1:19 Examples of intangible assets
4. 2:03 Asset recognition requirements explained
5. 2:16 Purchased versus internally generated intangibles
6. 3:41 Recognition practice question walkthrough

About this lesson

You'll explore the key definitions under IAS 38, understand the recognition criteria from the conceptual framework, and discover why purchased intangibles are capitalised while internally generated ones typically aren't. Through practical examples—from software and trade licences to brands acquired in business combinations—you'll develop the confidence to apply these principles accurately in your Financial Reporting or Strategic Business Reporting exams. This lesson covers the critical distinction between tangible and intangible assets, establishing that intangibles are identifiable, non-monetary assets without physical substance such as patents, trademarks, and licences. Recognition depends on meeting two tests: the IAS 38 definition of an intangible asset and the conceptual framework's asset definition, which requires probable future economic benefit and reliable measurement. The session emphasises that separately purchased intangibles should always be recognised at cost, intangibles acquired as part of a business combination are recognised when control passes, and internally generated intangibles are rarely recognised due to measurement uncertainty. You'll work through a practical scenario identifying which items satisfy IAS 38 criteria, learning why employee training costs cannot be capitalised (employees aren't controlled resources), why marketing spend is typically expensed (uncertain future benefit), and why acquired brands are recognised regardless of whether purchased separately or as part of a subsidiary acquisition. This targeted approach ensures you can confidently tackle recognition questions in your exams and apply the principles to real business scenarios.

Duration: 6m