6 necessary conditions for recognizing development cost as intangible assets

6 necessary conditions for recognizing development cost as intangible assets.

According to IAS 38 intangible assets, development expenditure are capitalized if the entity can demonstrate the following conditions



  • The technical feasibility of completing the intangible asset so that it will be available for use or for sale
  • Its intention is to complete the intangible asset and use or sell it
  • Its ability to use or sell the intangible assets;
  • How the intangible asset will generate probable future economic benefits. Among other things, the entity can demonstrate the existence of the market for the output of the intangible cost or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset;
  • The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset;
  • Its ability to measure reliably the expenditure attributable to the intangible asset during its development



2 thoughts on “6 necessary conditions for recognizing development cost as intangible assets.”

  1. Pingback: Recognition criteria for intangible assets according to IAS 38.

  2. Pingback: What Is Intangible Asset? - ACCOUNTING CLASS

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