Aasb 138 Software
eACT AIFRS Policy Summary AASB 138
AASB 138 “INTANGIBLE ASSETS”
(IN PARTICULAR SOFTWARE)
BACKGROUND
AASB 138 Intangible Assets is an Australian Equivalent International Financial
Reporting Standard (AIFRS) applicable to financial years beginning on or after 1
January 2005.
There is currently no Australian Accounting Standard that comprehensively deals with intangible assets. However there are general requirements contained in a number of standards that are applied to intangible assets. AASB 138 will replace the general requirements in six current Australian standards including AASB 1041 Revaluation of
Non-Current Assets, AAS 4 Depreciation, AAS 10 Recoverable Amount of NonCurrent Assets, AAS 21 Acquisitions of Assets, AAS 13 Accounting for Research and
Development Costs and AAS 18 Accounting for Goodwill. AASB 138 also covers some of the general principals covered in Statement of Accounting Concepts (SAC) 4.
This Policy Summary goes through the main requirements in AASB 138 and also outlines the main differences between the general requirements in the existing AASB and AAS standards regarding intangible assets and the new requirements of
AASB 138.
The main impact of this standard on ACT Government agencies is in relation to software, as this is the only material intangible asset that is held by the ACT.
As a result, this policy summary emphasises the application of this standard to software. NEW REQUIREMENTS
Definition
An intangible asset is defined in AASB 138 as an identifiable non-monetary asset without physical substance. This definition includes software.
Software
AASB 138 requires that where software is integral to the related hardware it should be included as property, plant and equipment rather than an intangible asset. For example, the operating system of a computer is integral to the operation of the computer, therefore the computer and operating system should be classified as property, plant and equipment. However
AASB 138 “INTANGIBLE ASSETS”
(IN PARTICULAR SOFTWARE)
BACKGROUND
AASB 138 Intangible Assets is an Australian Equivalent International Financial
Reporting Standard (AIFRS) applicable to financial years beginning on or after 1
January 2005.
There is currently no Australian Accounting Standard that comprehensively deals with intangible assets. However there are general requirements contained in a number of standards that are applied to intangible assets. AASB 138 will replace the general requirements in six current Australian standards including AASB 1041 Revaluation of
Non-Current Assets, AAS 4 Depreciation, AAS 10 Recoverable Amount of NonCurrent Assets, AAS 21 Acquisitions of Assets, AAS 13 Accounting for Research and
Development Costs and AAS 18 Accounting for Goodwill. AASB 138 also covers some of the general principals covered in Statement of Accounting Concepts (SAC) 4.
This Policy Summary goes through the main requirements in AASB 138 and also outlines the main differences between the general requirements in the existing AASB and AAS standards regarding intangible assets and the new requirements of
AASB 138.
The main impact of this standard on ACT Government agencies is in relation to software, as this is the only material intangible asset that is held by the ACT.
As a result, this policy summary emphasises the application of this standard to software. NEW REQUIREMENTS
Definition
An intangible asset is defined in AASB 138 as an identifiable non-monetary asset without physical substance. This definition includes software.
Software
AASB 138 requires that where software is integral to the related hardware it should be included as property, plant and equipment rather than an intangible asset. For example, the operating system of a computer is integral to the operation of the computer, therefore the computer and operating system should be classified as property, plant and equipment. However