IAS 38Workpapers (Step 4 of 5)

Workpaper template

Step 4 of 5

WorkpaperIAS 38 — Intangible AssetsL1 · L2 · L3

Separate acquisition: cost of the intangible asset

2 missions9 sections to document35 min

Prepared by: AI-assisted draft
Reviewed by: Not reviewed — human review required
Status: Published

Objective of the workpaper

Check that the item acquired meets the definition and the recognition criteria, classify each expenditure (capitalised or expensed), determine the cost (net purchase price and directly attributable costs up to the date the asset is capable of operating as intended) and record the acquisition and the expenses.

9 sections · 23 blocks · 5 calculations · 2 entries

IAS 38 §18
IAS 38 §21
IAS 38 §27
IAS 38 §28
IAS 38 §29
IAS 38 §30

Work this workpaper as a mission

Each case that uses this template opens in the mission workspace: data, analysis, calculation, entries, conclusion and review, with your progress saved.

2 instances from the cases: the calculations and entries below are run by the calculation engine.

File and entity

Acquisition of a management software licence

Case tasks documented here

Does the licence meet the definition of an intangible asset and the recognition criteria?
Determine the cost of the licence and the total costs to be expensed.
Which journal entries do you record in 20X1?

Inputs

Intangible asset acquired (nature, rights obtained, supplier)
TextRequired
Date the asset is capable of operating as intended
DateRequired
20X1-04-01
Invoiced purchase price excluding taxes
NumberRequired
180,000
Trade discounts and rebates
Number
18,000
Non-refundable purchase taxes and duties
Number
3,000
Import duties and non-refundable purchase taxes (for example a registration duty) form part of the purchase price; only recoverable taxes are excluded (para. 27).
Recoverable taxes invoiced (excluded from cost)
Number
32,400
Amount due to the supplier (invoice total)
NumberRequired
194,400
Cost components settled in cash (non-refundable taxes and directly attributable costs)
Number
38,000
Expensed costs settled in cash
Number
13,000

Supporting evidence

Evidence

Evidence obtained and referenced (category, document reference)
EvidenceRequired

Definition and recognition criteria

Analysis

IAS 38 §18IAS 38 §21

Conditions verified before recognising the asset
ChecklistRequired
- The item meets the definition of an intangible asset
- Probable future economic benefits attributable to the asset
- Cost measured reliably (invoice, contract)

Classification of expenditure

Analysis

IAS 38 §27IAS 38 §28IAS 38 §29IAS 38 §30

Costs directly attributable to preparing the asset (capitalised)
TableRequired
21,000 | 6,000 | 8,000
Expenditure excluded from cost (expense): launch, training, overheads, costs after the asset is ready
Table
7,000 | 4,000 | 2,000

Acquisition cost

Calculations

IAS 38 §27IAS 38 §28IAS 38 §29

Net purchase price (after discounts, including non-refundable taxes)
CalculationRequired
165,000
Invoiced purchase price excluding taxes ; − Trade discounts and rebates ; Non-refundable purchase taxes and duties
Total directly attributable costs
CalculationRequired
35,000
Costs directly attributable to preparing the asset (capitalised)
Cost of the intangible asset
CalculationRequired
200,000
Net purchase price (after discounts, including non-refundable taxes) ; Total directly attributable costs
Total expensed
Calculation
13,000
Expenditure excluded from cost (expense): launch, training, overheads, costs after the asset is ready
Expensed costs still payable
Calculation
0
Total expensed ; − Expensed costs settled in cash

Journal entries

Entries

Acquisition of the asset
EntryRequired
Account Debit Credit
Intangible asset (cost) 200,000
Recoverable taxes 32,400
Supplier payable 194,400
Cash (attributable costs paid) 38,000
Costs recognised as expenses
Entry
Account Debit Credit
Operating expenses 13,000
Cash 13,000

Account	Debit	Credit
Intangible asset (cost)	200,000
Recoverable taxes	32,400
Supplier payable		194,400
Cash (attributable costs paid)		38,000

Account	Debit	Credit
Operating expenses	13,000
Cash		13,000

Conclusion

Conclusion on recognition and the cost retained
ConclusionRequired

Financial statement impact

FS impact

Impact by caption, derived from the entries above (the Notes line refers to the disclosures)
TableRequired

Normative references

References

Paragraphs cited in this workpaper (verification status shown from the register)
References

Checks and financial statement impact

The cost of the asset is determinedPass
The acquisition entry is balancedPass
The expense entry is balancedPass

Assets: 181,400
Liabilities: 194,400
Profit or loss: -13,000
OCI: 0
Equity: -13,000

File and entity

Professional file: year-end close of the intangible assets of a software publisher

Case tasks documented here

Calculate the cost of the Orion licence.
Which acquisition entry do you record?

Inputs

Intangible asset acquired (nature, rights obtained, supplier)
TextRequired
Date the asset is capable of operating as intended
DateRequired
20X2-04-01
Invoiced purchase price excluding taxes
NumberRequired
250,000
Trade discounts and rebates
Number
10,000
Non-refundable purchase taxes and duties
Number
Import duties and non-refundable purchase taxes (for example a registration duty) form part of the purchase price; only recoverable taxes are excluded (para. 27).
Recoverable taxes invoiced (excluded from cost)
Number
48,000
Amount due to the supplier (invoice total)
NumberRequired
288,000
Cost components settled in cash (non-refundable taxes and directly attributable costs)
Number
30,000
Expensed costs settled in cash
Number

Supporting evidence

Evidence

Evidence obtained and referenced (category, document reference)
EvidenceRequired

Definition and recognition criteria

Analysis

IAS 38 §18IAS 38 §21

Conditions verified before recognising the asset
ChecklistRequired
- The item meets the definition of an intangible asset
- Probable future economic benefits attributable to the asset
- Cost measured reliably (invoice, contract)

Classification of expenditure

Analysis

IAS 38 §27IAS 38 §28IAS 38 §29IAS 38 §30

Costs directly attributable to preparing the asset (capitalised)
TableRequired
20,000 | 10,000
Expenditure excluded from cost (expense): launch, training, overheads, costs after the asset is ready
Table

Acquisition cost

Calculations

IAS 38 §27IAS 38 §28IAS 38 §29

Net purchase price (after discounts, including non-refundable taxes)
CalculationRequired
240,000
Invoiced purchase price excluding taxes ; − Trade discounts and rebates ; Non-refundable purchase taxes and duties
Total directly attributable costs
CalculationRequired
30,000
Costs directly attributable to preparing the asset (capitalised)
Cost of the intangible asset
CalculationRequired
270,000
Net purchase price (after discounts, including non-refundable taxes) ; Total directly attributable costs
Total expensed
Calculation
0
Expenditure excluded from cost (expense): launch, training, overheads, costs after the asset is ready
Expensed costs still payable
Calculation
0
Total expensed ; − Expensed costs settled in cash

Journal entries

Entries

Acquisition of the asset
EntryRequired
Account Debit Credit
Intangible asset (cost) 270,000
Recoverable taxes 48,000
Supplier payable 288,000
Cash (attributable costs paid) 30,000
Costs recognised as expenses
Entry
Debit Operating expenses ← Total expensed ; Credit Cash ← Expensed costs settled in cash ; Credit Payables ← Expensed costs still payable

Account	Debit	Credit
Intangible asset (cost)	270,000
Recoverable taxes	48,000
Supplier payable		288,000
Cash (attributable costs paid)		30,000

Conclusion

Conclusion on recognition and the cost retained
ConclusionRequired

Financial statement impact

FS impact

Impact by caption, derived from the entries above (the Notes line refers to the disclosures)
TableRequired

Normative references

References

Paragraphs cited in this workpaper (verification status shown from the register)
References

Checks and financial statement impact

The cost of the asset is determinedPass
The acquisition entry is balancedPass
The expense entry is balancedNot evaluated

Assets: 288,000
Liabilities: 288,000
Profit or loss: 0
OCI: 0
Equity: 0

Inputs

Intangible asset acquired (nature, rights obtained, supplier)
TextRequired
Date the asset is capable of operating as intended
DateRequired
Invoiced purchase price excluding taxes
NumberRequired
Trade discounts and rebates
Number
Non-refundable purchase taxes and duties
Number
Import duties and non-refundable purchase taxes (for example a registration duty) form part of the purchase price; only recoverable taxes are excluded (para. 27).
Recoverable taxes invoiced (excluded from cost)
Number
Amount due to the supplier (invoice total)
NumberRequired
Cost components settled in cash (non-refundable taxes and directly attributable costs)
Number
Expensed costs settled in cash
Number

Supporting evidence

Evidence

Evidence obtained and referenced (category, document reference)
EvidenceRequired

Definition and recognition criteria

Analysis

IAS 38 §18IAS 38 §21

Conditions verified before recognising the asset
ChecklistRequired
- The item meets the definition of an intangible asset
- Probable future economic benefits attributable to the asset
- Cost measured reliably (invoice, contract)

Classification of expenditure

Analysis

IAS 38 §27IAS 38 §28IAS 38 §29IAS 38 §30

Costs directly attributable to preparing the asset (capitalised)
TableRequired
Expenditure excluded from cost (expense): launch, training, overheads, costs after the asset is ready
Table

Acquisition cost

Calculations

IAS 38 §27IAS 38 §28IAS 38 §29

Net purchase price (after discounts, including non-refundable taxes)
CalculationRequired
Invoiced purchase price excluding taxes ; − Trade discounts and rebates ; Non-refundable purchase taxes and duties
Total directly attributable costs
CalculationRequired
Costs directly attributable to preparing the asset (capitalised)
Cost of the intangible asset
CalculationRequired
Net purchase price (after discounts, including non-refundable taxes) ; Total directly attributable costs
Total expensed
Calculation
Expenditure excluded from cost (expense): launch, training, overheads, costs after the asset is ready
Expensed costs still payable
Calculation
Total expensed ; − Expensed costs settled in cash

Journal entries

Entries

Acquisition of the asset
EntryRequired
Debit Intangible asset (cost) ← Cost of the intangible asset ; Debit Recoverable taxes ← Recoverable taxes invoiced (excluded from cost) ; Credit Supplier payable ← Amount due to the supplier (invoice total) ; Credit Cash (attributable costs paid) ← Cost components settled in cash (non-refundable taxes and directly attributable costs)
Costs recognised as expenses
Entry
Debit Operating expenses ← Total expensed ; Credit Cash ← Expensed costs settled in cash ; Credit Payables ← Expensed costs still payable

Conclusion

Conclusion on recognition and the cost retained
ConclusionRequired

Financial statement impact

FS impact

Impact by caption, derived from the entries above (the Notes line refers to the disclosures)
TableRequired

Normative references

References

Paragraphs cited in this workpaper (verification status shown from the register)
References