Accounting · Intangible Assets (IAS 38)
Which of the following scenarios describes an intangible asset that would NOT be amortised according to IAS 38 'Intangible Assets'?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A license to operate a specific frequency for a telecommunications company, granted for a fixed term of 10 years, with no renewal option.
- 2A brand name acquired as part of a business combination, which the company intends to maintain indefinitely through marketing efforts, and historical data supports its perpetual existence.✓
- 3Development costs capitalised for a new software product, expected to generate revenue for 7 years, after which a new version will be released.
- 4A patent for a new pharmaceutical drug, valid for 20 years, where the company plans to sell the drug for the full patent life.
Correct answer
A brand name acquired as part of a business combination, which the company intends to maintain indefinitely through marketing efforts, and historical data supports its perpetual existence.
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