Final answer:
According to IAS 38, a patent, capitalized development costs, and a broadcasting licence qualify as intangible assets, but a physical factory does not. The correct answer to the question is option b) 1, 2 and 3 only.
Step-by-step explanation:
According to IAS 38 Intangible Assets, an intangible asset is an identifiable non-monetary asset without physical substance. For an asset to be classified as an intangible asset, it must meet the following criteria: it must be identifiable, the entity must control the asset, and the asset must be capable of generating future economic benefits. Based on IAS 38, let's evaluate the items listed.
- A patent for a new glue purchased would be considered an intangible asset since it is identifiable, controllable by Iota Co, and expected to generate future economic benefits through its use.
- Development costs that have been capitalised in accordance with IAS 38 are also considered intangible assets, provided they meet the recognition criteria which includes the demonstration of the technical feasibility, intention and ability to complete and use or sell the intangible asset, and how it will generate probable future economic benefits.
- A licence to broadcast a television series is an intangible asset as well since it parallels the definition and recognition criteria by being an identifiable resource controlled by the entity and capable of providing future economic benefits.
- However, a state of the art factory does not qualify as an intangible asset since it is a physical substance. Therefore, it is considered a tangible asset, specifically property, plant and equipment.
Based on the above explanations, the intangible non-current assets in the Iota Co financial statements would be (1) a patent for a new glue, (2) development costs capitalised, and (3) a licence to broadcast a television series. Therefore, the correct answer to the question is option b) 1, 2 and 3 only.