Intangible assets - part 2

In this lesson

1. 0:00 Intangible non-current assets overview
2. 0:15 Research versus development explained
3. 0:51 Golf ball analogy for research
4. 3:06 Development expenditure definition
5. 5:37 PIRATE mnemonic for six criteria
6. 6:11 Initial recognition and amortisation
7. 7:32 Revaluation of intangibles
8. 8:25 Derecognition and disposal treatment

About this lesson

You'll explore the six-part definition of development expenditure (the "PIRATE" test: Probable future benefit, Intention to complete, Resources available, Ability to sell, Technically feasible, Expenditure measurable) and understand why saying yes to all six criteria means an asset can be recognised on the statement of financial position. This content is essential for Financial Reporting (FR), Strategic Business Reporting (SBR), and Advanced Financial Reporting (F2) papers, where intangible asset accounting directly impacts financial statements and exam success. The lesson also covers recognition and measurement principles for all intangibles. Intangible assets are initially recognised at cost and amortised over their useful economic life—except goodwill, which is tested annually for impairment instead. You'll learn when to derecognise intangible assets (when control is lost on sale) and how to calculate profit or loss on disposal. Revaluation of intangibles is theoretically possible but highly unlikely in practice due to the absence of reliable market data, so focus your revision on the core rules: cost recognition, amortisation, and the PIRATE test for development expenditure.

Duration: 10m