128 An entity is encouraged, but not required, to disclose the following information:
(a) a description of any fully amortised intangible asset that is still in use; and
(b) a brief description of significant intangible assets controlled by the entity but not recognised as assets because they did not meet the recognition criteria in this Standard.
Transitional provisions and effective date
129 \[Deleted\]
130 \[Deleted by the AASB\]
Aus130.1 An entity shall apply this Standard for annual periods beginning on or after 1 January 2018. Earlier application is encouraged for periods beginning on or after 1 January 2014 but before 1 January 2018. If an entity applies the Standard for a period beginning before 1 January 2018, it shall disclose that fact.
130A–
130B \[Deleted by the AASB\]
130C AASB 2008-3 Amendments to Australian Accounting Standards Arising from AASB 3 and AASB 127 amended the previous version of this Standard as follows: amended paragraphs 12, 33–35, 68, 69, 94 and 130, deleted paragraphs 38 and 129 and added paragraph 115A. AASB 2009-4 Amendments to Australian Accounting Standards arising from the Annual Improvements Project, issued in May 2009, amended paragraphs 36 and 37 in the previous version of this Standard. An entity shall apply those amendments prospectively for annual periods beginning on or after 1 July 2009. Therefore, amounts recognised for intangible assets and goodwill in prior business combinations shall not be adjusted. If an entity applies AASB 3 (revised 2008) for an earlier period, it shall apply the amendments for that earlier period and disclose that fact.
130D \[Deleted by the AASB\]
130E \[Deleted\]
130F–
130G \[Deleted by the AASB\]
130H AASB 2014-1 Amendments to Australian Accounting Standards, issued in June 2014, amended paragraph 80 in the previous version of this Standard. An entity shall apply that amendment for annual periods beginning on or after 1 July 2014. Earlier application is permitted. If an entity applies that amendment for an earlier period it shall disclose that fact.
130I An entity shall apply the amendment made by AASB 2014-1 to all revaluations recognised in annual periods beginning on or after the date of initial application of that amendment and in the immediately preceding annual period. An entity may also present adjusted comparative information for any earlier periods presented, but it is not required to do so. If an entity presents unadjusted comparative information for any earlier periods, it shall clearly identify the information that has not been adjusted, state that it has been presented on a different basis and explain that basis.
130J AASB 2014-4 Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of Depreciation and Amortisation, issued in August 2014, amended the previous version of this Standard as follows: amended paragraphs 92 and 98 and added paragraphs 98A–98C. An entity shall apply those amendments prospectively for annual periods beginning on or after 1 January 2016. Earlier application is permitted. If an entity applies those amendments for an earlier period it shall disclose that fact.
130K AASB 2014-5 Amendments to Australian Accounting Standards arising from AASB 15, issued in December 2014, amended paragraphs 3, 114 and 116 in the previous version of this Standard. An entity shall apply those amendments when it applies AASB 15.
130L AASB 16, issued in February 2016, amended paragraphs 3, 6, 113 and 114. An entity shall apply those amendments when it applies AASB 16.
130M AASB 17, issued in July 2017, amended paragraph 3. AASB 2020-5 Amendments to Australian Accounting Standards – Insurance Contracts, issued in July 2020, further amended paragraph 3. An entity shall apply that amendment when it applies AASB 17.
Exchanges of similar assets
131 \[Deleted by the AASB\]
Early application
132 \[Deleted by the AASB\]
Withdrawal of IAS 38 (issued 1998)
133 \[Deleted by the AASB\]
Commencement of the legislative instrument
Aus133.1 [Repealed]
Withdrawal of AASB pronouncements
Aus133.2 This Standard repeals AASB 138 Intangible Assets issued in July 2004. Despite the repeal, after the time this Standard starts to apply under section 334 of the Corporations Act (either generally or in relation to an individual entity), the repealed Standard continues to apply in relation to any period ending before that time as if the repeal had not occurred.
\[Note: When this Standard applies under section 334 of the Corporations Act (either generally or in relation to an individual entity), it supersedes the application of the repealed Standard.\]
Appendix A
Australian simplified disclosures for Tier 2 entities
Note: This appendix is an integral part of the Standard.
AusA1 Paragraphs 118–128 do not apply to entities preparing general purpose financial statements that apply AASB 1060 General Purpose Financial Statements – Simplified Disclosures for For-Profit and Not-for-Profit Tier 2 Entities.
Illustrative examples
Note: These examples accompany, but are not part of, AASB 138.
Assessing the useful lives of intangible assets
The following guidance provides examples on determining the useful life of an intangible asset in accordance with AASB 138.
Each of the following examples describes an acquired intangible asset, the facts and circumstances surrounding the determination of its useful life, and the subsequent accounting based on that determination.
Example 1 An acquired customer list
A direct-mail marketing company acquires a customer list and expects that it will be able to derive benefit from the information on the list for at least one year, but no more than three years.
The customer list would be amortised over management’s best estimate of its useful life, say 18 months. Although the direct-mail marketing company may intend to add customer names and other information to the list in the future, the expected benefits of the acquired customer list relate only to the customers on that list at the date it was acquired. The customer list also would be reviewed for impairment in accordance with AASB 136 Impairment of Assets by assessing at the end of each reporting period whether there is any indication that the customer list may be impaired.
Example 2 An acquired patent that expires in 15 years
The product protected by the patented technology is expected to be a source of net cash inflows for at least 15 years. The entity has a commitment from a third party to purchase that patent in five years for 60 per cent of the fair value of the patent at the date it was acquired, and the entity intends to sell the patent in five years.
The patent would be amortised over its five-year useful life to the entity, with a residual value equal to the present value of 60 per cent of the patent’s fair value at the date it was acquired. The patent would also be reviewed for impairment in accordance with AASB 136 by assessing at the end of each reporting period whether there is any indication that it may be impaired.
Example 3 An acquired copyright that has a remaining legal life of 50 years
An analysis of consumer habits and market trends provides evidence that the copyrighted material will generate net cash inflows for only 30 more years.
The copyright would be amortised over its 30-year estimated useful life. The copyright also would be reviewed for impairment in accordance with AASB 136 by assessing at the end of each reporting period whether there is any indication that it may be impaired.
Example 4 An acquired broadcasting licence that expires in five years
The broadcasting licence is renewable every 10 years if the entity provides at least an average level of service to its customers and complies with the relevant legislative requirements. The licence may be renewed indefinitely at little cost and has been renewed twice before the most recent acquisition. The acquiring entity intends to renew the licence indefinitely and evidence supports its ability to do so. Historically, there has been no compelling challenge to the licence renewal. The technology used in broadcasting is not expected to be replaced by another technology at any time in the foreseeable future. Therefore, the licence is expected to contribute to the entity’s net cash inflows indefinitely.
The broadcasting licence would be treated as having an indefinite useful life because it is expected to contribute to the entity’s net cash inflows indefinitely. Therefore, the licence would not be amortised until its useful life is determined to be finite. The licence would be tested for impairment in accordance with AASB 136 annually and whenever there is an indication that it may be impaired.
Example 5 The broadcasting licence in Example 4
The licensing authority subsequently decides that it will no longer renew broadcasting licences, but rather will auction the licences. At the time the licensing authority’s decision is made, the entity’s broadcasting licence has three years until it expires. The entity expects that the licence will continue to contribute to net cash inflows until the licence expires.
Because the broadcasting licence can no longer be renewed, its useful life is no longer indefinite. Thus, the acquired licence would be amortised over its remaining three-year useful life and immediately tested for impairment in accordance with AASB 136.
Example 6 An acquired airline route authority between two European cities that expires in three years
The route authority may be renewed every five years, and the acquiring entity intends to comply with the applicable rules and regulations surrounding renewal. Route authority renewals are routinely granted at a minimal cost and historically have been renewed when the airline has complied with the applicable rules and regulations. The acquiring entity expects to provide service indefinitely between the two cities from its hub airports and expects that the related supporting infrastructure (airport gates, slots, and terminal facility leases) will remain in place at those airports for as long as it has the route authority. An analysis of demand and cash flows supports those assumptions.
Because the facts and circumstances support the acquiring entity’s ability to continue providing air service indefinitely between the two cities, the intangible asset related to the route authority is treated as having an indefinite useful life. Therefore, the route authority would not be amortised until its useful life is determined to be finite. It would be tested for impairment in accordance with AASB 136 annually and whenever there is an indication that it may be impaired.
Example 7 An acquired trademark used to identify and distinguish a leading consumer product that has been a market-share leader for the past eight years
The trademark has a remaining legal life of five years but is renewable every 10 years at little cost. The acquiring entity intends to renew the trademark continuously and evidence supports its ability to do so. An analysis of (1) product life cycle studies, (2) market, competitive and environmental trends, and (3) brand extension opportunities provides evidence that the trademarked product will generate net cash inflows for the acquiring entity for an indefinite period.
The trademark would be treated as having an indefinite useful life because it is expected to contribute to net cash inflows indefinitely. Therefore, the trademark would not be amortised until its useful life is determined to be finite. It would be tested for impairment in accordance with AASB 136 annually and whenever there is an indication that it may be impaired.
Example 8 A trademark acquired 10 years ago that distinguishes a leading consumer product
The trademark was regarded as having an indefinite useful life when it was acquired because the trademarked product was expected to generate net cash inflows indefinitely. However, unexpected competition has recently entered the market and will reduce future sales of the product. Management estimates that net cash inflows generated by the product will be 20 per cent less for the foreseeable future. However, management expects that the product will continue to generate net cash inflows indefinitely at those reduced amounts.
As a result of the projected decrease in future net cash inflows, the entity determines that the estimated recoverable amount of the trademark is less than its carrying amount, and an impairment loss is recognised. Because it is still regarded as having an indefinite useful life, the trademark would continue not to be amortised but would be tested for impairment in accordance with AASB 136 annually and whenever there is an indication that it may be impaired.
Example 9 A trademark for a line of products that was acquired several years ago in a business combination
At the time of the business combination the acquiree had been producing the line of products for 35 years with many new models developed under the trademark. At the acquisition date the acquirer expected to continue producing the line, and an analysis of various economic factors indicated there was no limit to the period the trademark would contribute to net cash inflows. Consequently, the trademark was not amortised by the acquirer. However, management has recently decided that production of the product line will be discontinued over the next four years.
Because the useful life of the acquired trademark is no longer regarded as indefinite, the carrying amount of the trademark would be tested for impairment in accordance with AASB 136 and amortised over its remaining four-year useful life.
Compilation details
Accounting Standard AASB 138 Intangible Assets (as amended)
Note: Compilation details are not part of AASB 138.
This compiled Standard applies to annual periods beginning on or after 1 January 2023 but before 1 July 2026. It takes into account amendments up to and including 15 December 2022 and was prepared on 6 April 2023 by the staff of the Australian Accounting Standards Board (AASB).
This compilation is not a separate Accounting Standard made by the AASB. Instead, it is a representation of AASB 138 (August 2015) as amended by other Accounting Standards, which are listed in the table below.
Table of Standards
Standard
Date made
FRL identifier
Commence-ment date
Effective date(annual periods… on or after …)
Application, saving or transitional provisions
AASB 138
14 Aug 2015
F2015L01558
31 Dec 2016
(beginning) 1 Jan 2018
see (a) below
AASB 2015-8
22 Oct 2015
F2015L01840
31 Dec 2016
(beginning) 1 Jan 2017
see (b) below
AASB 16
23 Feb 2016
F2016L00233
31 Dec 2018
(beginning) 1 Jan 2019
see (c) below
AASB 1058
9 Dec 2016
F2017L00042
31 Dec 2018
(beginning) 1 Jan 2019
see (c) below
AASB 2016-7
9 Dec 2016
F2017L00043
31 Dec 2016
(beginning) 1 Jan 2017
see (d) below
AASB 1059
14 Jul 2017
F2017L01183
31 Dec 2018
(beginning) 1 Jan 2020
see (e) below
AASB 17
19 Jul 2017
F2017L01184
31 Dec 2022
(beginning) 1 Jan 2023
see (f) below
AASB 2019-1
21 May 2019
F2019L00966
31 Dec 2019
(beginning) 1 Jan 2020
see (e) below
AASB 1060
6 Mar 2020
F2020L00288
30 Jun 2021
(beginning) 1 Jul 2021
see (g) below
AASB 2022-8
15 Dec 2022
F2023L00014
31 Dec 2022
(beginning) 1 Jan 2023
see (h) below
AASB 2022-9
15 Dec 2022
F2023L00015
30 Jun 2026
(beginning) 1 Jul 2026
not compiled*
\* The amendments made by this Standard are not included in this compilation, which presents the principal Standard as applicable to annual periods beginning on or after 1 January 2023 but before 1 July 2026.
(a) AASB 138 applies to annual periods beginning on or after 1 January 2018 (instead of 1 January 2017) as a result of amendments made by AASB 2015-8 Amendments to Australian Accounting Standards – Effective Date of AASB 15. Entities may elect to apply this Standard to periods beginning on or after 1 January 2014 but before 1 January 2018.
(b) Entities may elect to apply this Standard to annual periods beginning before 1 January 2017, provided that AASB 15 Revenue from Contracts with Customers is also applied.
(c) Entities may elect to apply this Standard to annual periods beginning before 1 January 2019, provided that AASB 15 is also applied to the same period.
(d) AASB 2016-7 deferred the effective date of AASB 15 (and its consequential amendments in AASB 2014-5) for not-for-profit entities to annual reporting periods beginning on or after 1 January 2019, instead of 1 January 2018. However, earlier application of AASB 138 (2015) incorporating the text that relates to AASB 15 is permitted, provided that AASB 15 is also applied.
(e) Entities may elect to apply this Standard to annual periods beginning before 1 January 2020.
(f) Entities may elect to apply this Standard to annual periods beginning before 1 January 2023, provided that AASB 9 Financial Instruments is also applied on or before the date of initial application of AASB 17. (AASB 17 was amended prior to its mandatory application by various amending Standards, including AASB 2022-8 Amendments to Australian Accounting Standards – Insurance Contracts: Consequential Amendments, made by the AASB on 15 December 2022.)
(g) Entities may elect to apply this Standard to annual periods beginning before 1 July 2021.
(h) Entities may elect to apply this Standard to annual periods beginning before 1 January 2023.
Table of amendments
Paragraph affected
How affected
By … [paragraph/page]
3
amendedamended
AASB 16 [page 54]AASB 17 [page 83]
Aus3.1
added
AASB 1059 [page 26]
Aus3.2
added
AASB 2022-8 [page 13]
6
amended
AASB 16 [page 54]
8
amended
AASB 2019-1 [page 23]
Aus24.1
amended
AASB 1058 [page 24]
44 (footnote)
amended
AASB 1058 [page 24]
113
amended
AASB 16 [page 54]
114
amended
AASB 16 [page 55]
Aus130.1
amended
AASB 2015-8 [13]
130L
added
AASB 16 [page 55]
130M
added
AASB 17 [page 83]
Aus133.1
repealed
Legislation Act 2003, s. 48D
Appendix A
replaced
AASB 1060 [page 65]
Deleted IAS 38 text
Note: Deleted IAS 38 text is not part of AASB 138.