BC50 The Board observed that the previous version of IAS 38 required an intangible asset to be measured after initial recognition:

(a) at cost less any accumulated amortisation and any accumulated impairment losses; or

(b) at a revalued amount, being the asset’s fair value, determined by reference to an active market, [IFRS 13, issued in May 2011, defines an active market.] at the date of revaluation less any subsequent accumulated amortisation and any subsequent accumulated impairment losses. Under this approach, revaluations must be made with such regularity that at the balance sheet date the carrying amount of the asset does not differ materially from its fair value.

Whichever of the above methods was used, the previous version of IAS 38 required the depreciable amount of the asset to be amortised on a systematic basis over the best estimate of its useful life.

BC51 The Board observed that underpinning the requirement for all intangible assets to be amortised is the notion that they all have determinable and finite useful lives. Setting aside the question of whether, and under what circumstances, an intangible asset could be regarded as having an indefinite useful life, an important issue for the Board to consider was whether a departure from the above requirements would be warranted for intangible assets acquired in a business combination that have finite useful lives.