(a)       Brand

The “Scott” brand is an 'internally generated' intangible asset rather than a purchased one.  IAS 38 specifically prohibits the recognition of internally generated brands, on the grounds that they cannot be reliably measured in the absence of a commercial transaction.  “Mini” brand was purchased from third party and can be measured reliably. Scott will recognise “Mini” brand as intangible asset in its statement of financial position.

(b)       Promotional activity

The promotional activity is treated as an expense. Promotional expenditure cannot be capitalised under IAS 38, as the economic benefits it generates cannot be clearly identified so no intangible asset is created.

(c)        Mini brand

The brand cannot be revalued under the IAS 38 rules as there is no active market as a brand is unique. IAS 38 does not permit revaluation without an active market as the value cannot be reliably measured in the absence of a commercial transaction.