26 In addition the cost of a separately acquired intangible asset can usually

26 in addition the cost of a separately acquired

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26     In addition, the cost of a separately acquired intangible asset can usually be measured reliably. This is particularly so when the purchase consideration is in the form of cash or other monetary assets.27     The cost of a separately acquired intangible asset comprises:(a)     its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates; and(b)     any directly attributable cost of preparing the asset for its intended use.28     Examples of directly attributable costs are:(a)     costs of employee benefits (as defined in IAS 19) arising directly from bringing the asset to its working condition;(b)     professional fees arising directly from bringing the asset to its working condition; and(c)     costs of testing whether the asset is functioning properly.29     Examples of expenditures that are not part of the cost of an intangible asset are:(a)     costs of introducing a new product or service (including costs of advertising and promotional activities);
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(b)     costs of conducting business in a new location or with a new class of customer (including costs of staff training); and(c)     administration and other general overhead costs.30     Recognition of costs in the carrying amount of an intangible asset ceases when the asset is in the condition necessary for it to be capable of operating in the manner intended by management. Therefore, costs incurred in using or redeploying an intangible asset are not included in the carrying amount of that asset. For example, the following costs are not included in the carrying amount of an intangible asset:(a)     costs incurred while an asset capable of operating in the manner intended by management has yet to be brought into use; and(b)     initial operating losses, such as those incurred while demand for the asset's output builds up.31     Some operations occur in connection with the development of an intangible asset, but are not necessary to bring the asset to the condition necessary for it to be capable of operating in the manner intended by management. These incidental operations may occur before or during the development activities. Because incidental operations are not necessary to bring an asset to the condition necessary for it to be capable of operating in the manner intended by management, the income and related expenses of incidental operations are recognised immediately in profit or loss, and included in their respective classifications of income and expense.
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