IAS 38Chapter 8Lesson 1
After recognition: cost model or revaluation model
Step 1 of 8Learning objectives
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Once the intangible asset has been recognised at cost, the entity chooses, class by class, between the cost model and the revaluation model. The cost model, by far the most widespread, carries the asset at cost less accumulated amortisation and accumulated impairment losses; the lesson works it through over three years and records the related entries.
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Learning objectives
- Identify the two measurement models after initial recognition and explain why the choice is made by class.
- Explain the carrying amount under the cost model and its three components (cost, accumulated amortisation, accumulated impairment losses).
- Calculate the carrying amount of an intangible asset over several years, including after an impairment loss.
- Record the amortisation charge and impairment loss entries under the cost model.