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How to recognise ISO Certification costs? Intangibles or expenses?


How to account for ISO Certification? Intangibles or expenses?

Kind regards!

asked Feb 25, 2017 in IAS 38 - Intangible Assets by anonymous

1 Answer

0 votes
An intangible asset is an identifiable non-monetary asset without physical substance.

An asset is identifiable if it either:
(a) is separable, ie is capable of being separated or divided from the entity and sold, transferred, licensed, rented or exchanged, either individually or together with a related contract, identifiable asset or liability, regardless of whether the entity intends to do so; or

(b) arises from contractual or other legal rights, regardless of whether those rights are transferable or separable from the entity or from other rights and obligations.

 I don't think ISO Certification cost could get into this definition.
answered Feb 25, 2017 by Tina Level 5 Member (11,560 points)
Why it shouldn't be recognized as intangible asset although it's measured reliable and have future economic benefits
I don't think the first condition, i.e. identifiable, for being an intangible assets is satisfied by ISO Certification as it neither can be sold or transferred nor it can be rented. Also, it does not have identifiable life as it is used for force-able future and its not a land. Thus, it better to charge ISO Certification expenses in the PL Account all at once. But if Certification has life, then irrespective of conditions in the standard, i have seen auditor who have charged said cost to intangible assets.
My View: I will go by the Accounting Standard. Thus, It should not be capitalized but should be charged in PL


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