Intangible Assets

  • Intangible Assets

    Project Status

    Project brief approved. ED 40 issued in February 2009. Standard approved in December 2009. IPSAS 31, Intangible Assets issued in January 2010.


    John Stanford

    Task Force

    A staff project.

    Objective(s) of project

    The objective of the project will be to develop financial reporting guidance on intangible assets converged with IAS 38 and SIC-32.


    The project would apply to all public sector entities that apply the accrual basis of accounting, other than GBEs which follow IAS 38. The Standard will not apply to a government's powers to grant rights and to tax, as they do not meet the existing definition of an asset in IPSAS 1. It applies to intangible assets acquired in an entity combination from exchange transactions; however, it does not apply to intangibles acquired as part of entity combinations from non-exchange transactions.


    Convergence with IAS 38 is an important step in achieving the IPSASB's strategic goal of IFRS convergence. In approving the project brief, the IPSASB noted that there were specific public sector issues related to intangible items, notably, government powers and rights conferred by legislation, a constitution, or by equivalent means, and the need to address service potential and non-exchange transactions.


    Issues the project intends to consider include (but is not necessarily limited to):

    • Definitions;
    • Powers to grant rights and to tax (see scope above);
    • Future economic benefit and service potential of intangible assets;
    • Treatment of intangible items not acquired or developed;
    • Treatment of internally generated intangible assets and goodwill;
    • Non-exchange transactions involving intangible items; and
    • Web site costs (SIC-32 guidance).

    The project will also develop public sector examples to illustrate application of the standard.

    Task Force progress / Board discussions to date

    January 2010: The IPSASB issued IPSAS 31, Intangible Assets. It is effective for annual periods beginning on or after April 1, 2011.

    December 2009: The IPSASB approved IPSAS 31, Intangible Assets for publication. In approving IPSAS 31, the IPSASB made the following key changes from ED 40, Intangible Assets:

    • References to powers to grant rights and to tax were changed to powers and rights conferred by legislation, a constitution, or by equivalent means;
    • Requirements and guidance pertaining to business combinations (entity combinations) and goodwill were removed pending approval of a Standard on entity combinations;
    • The guidance on exchange transactions that lack commercial substance was deleted on the basis that such transactions are addressed in IPSAS 23, Revenue from Non-exchange Transactions (Taxes and Transfers); and
    • The transitional provisions were clarified.

    September 2009: The IPSASB discussed key issues respondents raised concerning the ED 40 proposals. The IPSASB agreed to clarify that the reason for excluding powers to grant rights and to tax from the proposed standard is becasue it is being considered in the project to develop a public sector conceptual framework. The IPSASB also agreed to explain its rationale for excluding emission trading schemes from the scope of the standard.

    May 2009: The IPSASB issued ED 40 Intangible Assets. Comments are requested by August 15, 2009.

    February 2009: The IPSASB discussed a revised draft exposure draft (ED) and agreed that the ED should differ from IAS 38 only to the extent required to address public sector specific issues. The IPSASB expects to approve an ED out-of-session, to be issued concurrently with ED 41 Entity Combinations.

    October 2008: The IPSASB discussed an ED and suggested clarification as to the scope inclusions and exclusions, and further changes to the examples and to how non-exchange transactions should be addressed.

    June 2008: The IPSASB approved a project brief to develop and IPSAS converged with IAS 38, and that includes public sector examples and the interpretation guidance in SIC-32.


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