• Service: Audit, Financial Statement Audit, Financial Reporting & Accounting Standards, Accounting Advisory Services, International Financial Reporting Standards (IFRS)
  • Type: Regulatory update
  • Date: 15/05/2014

IFRS In the Headlines

IFRS In the Headlines
In the Headlines (formerly IFRS Briefing Sheets) provide a timely update on International Financial Reporting Standards (IFRS) developments.

Restricting the use of revenue-based amortisation (2014/08) 

This issue of In the Headlines highlights the amendments made to IAS 38 Intangible Assets and IAS 16 Property, Plant and Equipment in relation to the use of revenue- based methods of amortisation and depreciation. The amendments are effective for annual periods beginning on or after 1 January 2016, and are to be applied prospectively. Early application is permitted.

What's the issue?

Intangible assets are sometimes amortised using methods based on the revenue that they generate.


For example, films and video games often generate higher revenues in the earlier years of their life, so media companies often amortise the associated intangible assets in line with the pattern of these revenues.


In such cases, expense recognition tends to be accelerated.