• Register
Search Questions / Answers

Welcome to AccountantAnswer Forum, where you can ask questions and receive answers. Although you need not be a member to ask questions or provide answers, we invite you to register an account and be a member of our community for mutual help. You can register with your email or with facebook login in few seconds

Get AccountantAnswer App


Our company recently bought some Microsoft Windows 7 & Office 2010 licenses for some computers which we have already been using with opensource software. My question is whether we need to treat these licenses as intangible assets as per IAS 38 or include in computer equipment & account for as per  IAS 16.
in IAS 38 - Intangible Assets by
retagged by

1 Answer

+1 vote
Best answer
The general rule is that when the software is an integral part of the hardware then the software cost should be included in the hardware and account for as per IAS 16 - Property Plant & Equipment. For example, an operating system such as Microsoft Windows, Mac, Linux of a computer is an integral part of the computer and the computer can not operate with such OS. Therefore operating system should be capitalized along with the hardware cost. However MS Office package is not an integral part of a computer and therefore should be treated as intangible assets and accounted for as per IAS 38 - Intangible Assets. Hope you got the answer.
by Level 2 Member (3.6k points)
selected by