Scope (AASB138_08-15_COMPdec22_01-23)

This Standard shall be applied in accounting for intangible assets, except:

(a) intangible assets that are within the scope of another Standard;

(b) financial assets, as defined in AASB 132 Financial Instruments: Presentation;

(c) the recognition and measurement of exploration and evaluation assets (see AASB 6 Exploration for and Evaluation of Mineral Resources); and

(d) expenditure on the development and extraction of minerals, oil, natural gas and similar non-regenerative resources.

If another Standard prescribes the accounting for a specific type of intangible asset, an entity applies that Standard instead of this Standard. For example, this Standard does not apply to:

(a) intangible assets held by an entity for sale in the ordinary course of business (see AASB 102 Inventories).

(b) deferred tax assets (see AASB 112 Income Taxes).

(c) leases of intangible assets accounted for in accordance with AASB 16 Leases.

(d) assets arising from employee benefits (see AASB 119 Employee Benefits).

(e) financial assets as defined in AASB 132. The recognition and measurement of some financial assets are covered by AASB 10 Consolidated Financial Statements, AASB 127 Separate Financial Statements and AASB 128 Investments in Associates and Joint Ventures.

(f) goodwill acquired in a business combination (see AASB 3 Business Combinations).

(g) contracts within the scope of AASB 17 Insurance Contracts and any assets for insurance acquisition cash flows as defined in AASB 17.

(h) non-current intangible assets classified as held for sale (or included in a disposal group that is classified as held for sale) in accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operations.

(i) assets arising from contracts with customers that are recognised in accordance with AASB 15 Revenue from Contracts with Customers.

This Standard does not apply to intangible assets recognised as service concession assets in accordance with AASB 1059 Service Concession Arrangements: Grantors, except as set out in that Standard.

Further to paragraph 3, public sector entities shall not apply this Standard to deferred acquisition costs, and intangible assets, arising from an insurer’s contractual rights under insurance contracts within the scope of AASB 4 Insurance Contracts. AASB 4 sets out specific disclosure requirements for those deferred acquisition costs but not for those intangible assets. Therefore, the disclosure requirements in this Standard apply to those intangible assets.

Some intangible assets may be contained in or on a physical substance such as a compact disc (in the case of computer software), legal documentation (in the case of a licence or patent) or film. In determining whether an asset that incorporates both intangible and tangible elements should be treated under AASB 116 Property, Plant and Equipment or as an intangible asset under this Standard, an entity uses judgement to assess which element is more significant. For example, computer software for a computer-controlled machine tool that cannot operate without that specific software is an integral part of the related hardware and it is treated as property, plant and equipment. The same applies to the operating system of a computer. When the software is not an integral part of the related hardware, computer software is treated as an intangible asset.

This Standard applies to, among other things, expenditure on advertising, training, start-up, research and development activities. Research and development activities are directed to the development of knowledge. Therefore, although these activities may result in an asset with physical substance (eg a prototype), the physical element of the asset is secondary to its intangible component, ie the knowledge embodied in it.

Rights held by a lessee under licensing agreements for items such as motion picture films, video recordings, plays, manuscripts, patents and copyrights are within the scope of this Standard and are excluded from the scope of AASB 16.

Exclusions from the scope of a Standard may occur if activities or transactions are so specialised that they give rise to accounting issues that may need to be dealt with in a different way. Such issues arise in the accounting for expenditure on the exploration for, or development and extraction of, oil, gas and mineral deposits in extractive industries and in the case of insurance contracts. Therefore, this Standard does not apply to expenditure on such activities and contracts. However, this Standard applies to other intangible assets used (such as computer software), and other expenditure incurred (such as start-up costs), in extractive industries or by insurers.