Scope exclusions

Learning objectives

• Identify the items excluded from the scope of IAS 38 and the Standard that deals with them.L1, L2

Normative references

• IAS 38 §2Scope: IAS 38 applies to intangible assets except those within the scope of another Standard, financial assets, exploration and evaluation assets, and expenditure on the development and extraction of non-regenerative resources.
• IAS 38 §3When another Standard prescribes the accounting for a specific type of intangible asset, that Standard applies. IAS 38 therefore does not apply, in particular, to: intangible assets held for sale in the ordinary course of business (IAS 2); deferred tax assets (IAS 12); leases of intangible assets accounted for under IFRS 16; assets arising from employee benefits (IAS 19); financial assets (IAS 32); goodwill acquired in a business combination (IFRS 3); contracts within the scope of IFRS 17; non-current intangible assets classified as held for sale (IFRS 5); assets arising from contracts with customers recognised in accordance with IFRS 15.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

8 questions

• True or false? An equity investment falls within the scope of IAS 38 because it has no physical substance.L1
• True or false? Expenditure on the development and extraction of minerals, oil or other non-regenerative resources is excluded from the scope of IAS 38.L1
• True or false? The exploration and evaluation assets of an oil company fall under IAS 38, since they have no physical substance.L1
• Which of these exclusions from the scope of IAS 38 is correctly matched with the standard that deals with the item?L1
• The oil company Brentano incurs several items of expenditure during the year. Which one is excluded from the scope of IAS 38?L2
• A trainee at Corvel Bank classifies debt securities held to maturity as intangible assets, on the grounds that they lack physical substance and are held for the long term. What error does he make?L2
• Which of the following items are among the express exclusions from the scope of IAS 38?L1
• Which of the following statements about the exclusions from the scope of IAS 38 are correct?L2