Intangible Assets

Scientific or technical knowledge, Design and implementation of new processes Systems, licences, intellectual property, market knowledge and trademarks (including brand names)

The objective of this Standard is to prescribe the accounting treatment for intangible assets that are not dealt with specifically in another Standard. This Standard requires an entity to recognise an intangible asset if, and only if, specified criteria are met. The Standard also specifies how to measure the carrying amount of intangible assets and requires specified disclosures about intangible assets.

This Standard shall be applied in accounting for intangible assets, except Intangible assets that are within the scope of another Standard; Financial assets, as defined in Ind AS 32 Financial Instruments: The recognition and measurement of exploration and evaluation assets and Expenditure on the development and extraction of minerals, oil, natural gas and similar nonregenerative resources.

An intangible asset shall be recognised if, and only if: (a) it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity; and (b) the cost of the asset can be measured reliably.

Under IND AS38, intangible assets having Indefinite useful life cannot be amortized. Indefinite useful life means where, based on analysis, there is no foreseeable limit to the period over which the asset is expected to generate net cash inflow for the entity. Indefinite is not equal to infinite. Such assets should be tested for impairment at each balance-sheet date & separately disclosed

Under IND AS38, if Intangible Asset is held for sale then amortization should be stopped. Under IND AS 38, R&D expenditure that relates to an inprocess R&D project acquired separately or in a business combination shall be accounted as Intangible Asset. Under IND AS38, Revaluation Model is allowed for accounting Intangible Asset provided active market exists. Web site costs shall be recognized separately.

First Time Adoption of Indian Accounting Standards

An entitys first Ind-AS financial statements, and its interim financial reports for part of the period covered by those financial statements: (a) is transparent for users and comparable over all periods presented; (b)provides a suitable starting point for accounting in accordance with Ind-ASs; and (c) can be generated at a cost that does not exceed the benefits.

An entity shall apply this Ind-AS in: (a)its first Ind-AS financial statements and

(b) each interim financial report, if any, that it presents in accordance with Ind AS 34 Interim Financial Reporting for part of the period covered by its first Ind-AS financial statements.

Share Based Payment

The objective of this Standard is to specify the financial reporting by an entity when it undertakes a share-based payment transaction. In particular, it requires an entity to reflect in its profit or loss and financial position the effects of share-based payment transactions, including expenses associated with transactions in which share options are granted to employees.

 Recognise as an expense over the vesting period. Goods and services in a share-based payment transaction are recognised when goods are received or as services are rendered. A corresponding increase in equity is recognised if goods and services were received in an equitysettled share-based payment transaction or a liability if these were acquired in a cash-settled share-based payment transaction.

 For equity settled share-based transactions, goods and services received and the corresponding increase in equity is measured at the fair value of the goods and services received. If the fair value of the goods and services cannot be estimated reliably, then the value is measured with reference to the fair value of the equity instruments granted.