IAS 38 Intangible Assets
IAS 38 is the IFRS home for internally generated AI intangibles. It splits activity into a research phase, expensed as incurred IAS 38-54, and a development phase, capitalized only when all six recognition criteria are met, including technical feasibility, intention and ability to complete, and probable future economic benefits IAS 38-57. Capitalized development is then amortized over its useful life IAS 38-97. There is no separate US-style stage model.
Research phase vs development phase
IAS 38 does not permit capitalizing research. Expenditure on the research phase, the original and planned investigation to gain new knowledge, is expensed as incurred IAS 38-54. Development is the application of research findings to a plan for producing a new or substantially improved asset. Only development-phase cost is potentially capitalizable, and only if the recognition criteria are met.
The six development recognition criteria
- Technical feasibility of completing the asset so it will be available for use or sale.
- Intention to complete and use or sell it.
- Ability to use or sell it.
- How it will generate probable future economic benefits.
- Availability of adequate technical, financial and other resources to complete it.
- Ability to measure reliably the expenditure attributable to it during development IAS 38-57.
All six must be met at once. For a novel model whose technical feasibility is not yet demonstrable, the criteria are not met and the compute is expensed, the IFRS analogue of the US significant-development-uncertainty gate.
Questions this posts answers
- Can I capitalize a training run under IFRS?
- Only if it is development phase and all six IAS 38.57 criteria are met, including demonstrable technical feasibility. Research-phase work is expensed under IAS 38.54.
Instruments and mechanics this standard decides
Primary sources
Ledger current as of 2026-07-24. A position and a citation, not accounting advice. See how we cite.