CERTYNEX IFRS ACADEMY

An entity is carrying out an internal project that may result in an intangible asset. What approach does IAS 38 require in order to assess whether the asset can be recognised?

Classify the generation of the asset into a research phase and a development phase.

Have an expert measure the fair value of the project at each reporting date.

Compare the project budget with the expected revenue from the future product on the market.

Wait until the project is completed to decide whether or not to capitalise all its expenditure.