IAS 38Chapter 5Lesson 2
Intangible assets received by way of a government grant or through an exchange of assets
Step 1 of 9Learning objectives
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Some intangible assets have no cash purchase price. When received free of charge or for a nominal price from the State, they are measured either at fair value or at the nominal amount plus directly attributable expenditure. When received in exchange for another asset, they are measured at fair value, unless the exchange lacks commercial substance or no fair value is reliable: cost is then the carrying amount of the asset given up.
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Learning objectives
- Distinguish the two initial measurements permitted for an intangible asset received by way of a government grant, and record each one.
- Determine the cost of an intangible asset acquired through an exchange: fair value or carrying amount of the asset given up.
- Assess the commercial substance of an exchange and the reliability of fair values, then choose the reference fair value.
- Record an exchange with and without commercial substance, including the gain on disposal.