IFRS 3 (Business Combinations) — if the customer relationship is acquired in a business combination. IFRS 3 paragraph 18 requires every identifiable intangible asset to be recognised separately from goodwill at fair value. Customer relationships meet the identifiability test under paragraph 11 (they arise from contractual or legal rights, even where contracts are not formal — they are separable in the sense that they could be sold or transferred). Internally generated customer relationships are *not* recognisable under IAS 38 paragraph 63.

IFRS 13 applies whenever another IFRS standard requires or permits fair value measurement. For intangibles, that means: acquisition-date fair value under IFRS 3, fair-value-less-costs-of-disposal in IAS 36 impairment testing, and revaluation measurement (rare) under IAS 38. IFRS 13 does *not* apply to cost-basis measurement under IAS 38 (the default for separately acquired or internally generated intangibles).

They are different concepts. IFRS 13 fair value is a market-participant exit price — the amount a hypothetical buyer would pay in an orderly transaction. IAS 36 value-in-use is an entity-specific present value of the future cash flows the entity expects to derive from continued use of the asset. The two will produce different numbers in many cases — IAS 36 requires the higher of fair-value-less-costs-of-disposal and value-in-use as the recoverable amount, precisely because the two concepts diverge.

No. IAS 38 paragraph 63 explicitly prohibits recognition of internally generated brands, mastheads, publishing titles, customer lists, and items similar in substance. The IASB's reasoning is that the cost of these items cannot be reliably distinguished from the cost of developing the business as a whole. The only path to balance-sheet recognition is acquisition: when a business is acquired, its brand becomes identifiable under IFRS 3 and is measured at fair value under IFRS 13.

IAS 38. IFRS 3 sets the initial fair-value measurement at acquisition date but does not address subsequent amortisation. IAS 38 paragraphs 88-110 govern amortisation: useful life is finite (amortise systematically) or indefinite (do not amortise, test annually for impairment); the method should reflect the pattern of consumption of economic benefits; residual value is presumed zero unless evidence supports otherwise.

The AICPA Practice Aid is a US-authored guidance document widely cited as best practice for income-approach valuation. It sits within the US framework (ASC 805 / ASC 820 / ASC 350) but its methodological recommendations — particularly MPEEM for primary intangibles and the contributory asset charge framework — are routinely applied under IFRS 3 + IFRS 13 + IAS 38. The Practice Aid is not binding outside the US, but its conventions have become the de facto international standard for income-approach intangible valuation.

The asset stops being amortised and starts being tested for impairment annually instead (IAS 38 paragraph 107 + IAS 36 paragraph 10(a)). A change from finite to indefinite is a change in accounting estimate under IAS 8 — applied prospectively. The reverse change (indefinite to finite) is also possible and is treated the same way. Both directions require disclosure of the reason for the reassessment.

Partially. FRS 102 Section 18 (Intangible Assets Other than Goodwill) covers intangibles broadly equivalent to IAS 38, with significant simplifications (development costs may be expensed or capitalised at policy choice; useful life capped at 10 years if not reliably estimable). FRS 102 Section 19 covers business combinations (broadly equivalent to IFRS 3 with simplifications). FRS 102 does not have a separate fair value standard equivalent to IFRS 13 — fair value measurement guidance is embedded in the relevant sections. UK groups reporting under IFRS apply IFRS 3 + IFRS 13 + IAS 38 directly.

Accounting Framework

IFRS 3 vs IFRS 13 vs IAS 38

IFRS 3 vs IFRS 13 vs IAS 38 — what each standard covers, where the boundaries lie, and how the three interact through an intangible's lifecycle.

Three IFRS standards govern the lifecycle of an intangible asset. IFRS 3 (Business Combinations) tells you which intangibles to recognise on acquisition and how to separate them from goodwill. IFRS 13 (Fair Value Measurement) defines fair value and the three-level hierarchy used to measure it. IAS 38 (Intangible Assets) governs the asset once on the balance sheet — initial recognition outside business combinations, subsequent measurement, amortisation, impairment cross-reference, and derecognition. The standards are sequential, not parallel; the same customer relationship is recognised under IFRS 3, measured under IFRS 13, then amortised under IAS 38.

Criteria	IFRS 3 (Business Combinations)	IFRS 13 (Fair Value) and IAS 38 (Intangible Assets)
Primary scope	Recognition and measurement of assets and liabilities acquired in a business combination	IFRS 13: definition of fair value plus framework for measuring it. IAS 38: recognition, measurement, amortisation and disposal of intangibles outside business combinations and lifecycle treatment after acquisition
When it applies	Only at acquisition date of a business combination	IFRS 13: whenever another IFRS requires or permits fair value measurement. IAS 38: throughout the life of an intangible from initial recognition to derecognition
Key principle	Identify and separately recognise every identifiable intangible from goodwill (paragraph 18)	IFRS 13: fair value is the exit price in an orderly transaction between market participants. IAS 38: intangibles recognised when economic benefits are probable and cost is measurable; internally generated brands and customer lists are prohibited
Measurement basis	Fair value at acquisition date (defers to IFRS 13)	IFRS 13: exit price, market-participant view, three-level hierarchy. IAS 38: cost model (default) or revaluation model; fair value measurement defers to IFRS 13
Treatment of internally generated intangibles	Out of scope — IAS 38 governs	IAS 38 paragraph 63 prohibits brands, mastheads, customer lists, and items similar in substance. Development costs only if six paragraph-57 criteria are met
Treatment of acquired intangibles	Recognised separately from goodwill if identifiable; measured at fair value	IFRS 13 provides the fair value measurement framework. IAS 38 takes over post-acquisition for amortisation, impairment cross-reference and derecognition
Useful life	Set at acquisition date for the PPA fair-value calculation	IAS 38: finite (amortise systematically) or indefinite (annual impairment test); reassessed each period under paragraph 109
Amortisation	Not addressed (post-acquisition matter)	IAS 38 paragraphs 88-110: systematic over useful life for finite-life; not amortised for indefinite-life
Impairment	Not addressed (post-acquisition matter)	IFRS 13: provides FVLCD measurement when needed by IAS 36. IAS 38: cross-reference to IAS 36
Disclosure burden	Heavy at acquisition date — assets recognised, fair-value basis, goodwill explanation, valuation techniques per IFRS 3 paragraphs B64-B67	IFRS 13: Level 3 disclosure (quantitative inputs, ranges, sensitivities) under paragraph 93. IAS 38: useful life, amortisation method, reconciliation of carrying amount under paragraphs 118-128
UK-adopted IFRS vs IASB IFRS	Identical	Identical for both IFRS 13 and IAS 38
US equivalent	ASC 805	IFRS 13 ↔ ASC 820. IAS 38 ↔ ASC 350 (goodwill and indefinite-life) plus ASC 985 (internal-use software) and others

When to Use Each Approach

IFRS 3 (Business Combinations)

Acquisition-date recognition of intangibles in a business combination
Distinguishing identifiable intangibles from goodwill
Determining the acquisition-date fair value basis (defers to IFRS 13)
PPA disclosure under paragraphs B64-B67

IFRS 13 (Fair Value) and IAS 38 (Intangible Assets)

Measuring fair value for any IFRS-required or permitted measurement (IFRS 13)
Recognising and accounting for intangibles outside business combinations (IAS 38)
Capitalising development costs against the six paragraph-57 criteria (IAS 38)
Amortising finite-life intangibles and testing indefinite-life intangibles for impairment (IAS 38 cross-ref to IAS 36)

Our Verdict

IFRS 3 is the entry point — it tells you which intangibles to recognise on acquisition and the separation principle from goodwill. IFRS 13 is the measurement engine — it defines fair value and the three-level hierarchy applied across all IFRS standards. IAS 38 is the lifecycle standard — internal generation rules, amortisation, impairment cross-reference, and derecognition. The same customer relationship is recognised under IFRS 3, measured under IFRS 13, then amortised under IAS 38. The three standards are sequential, not parallel.

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IFRS 3 vs IFRS 13 vs IAS 38

When to Use Each Approach

IFRS 3 (Business Combinations)

IFRS 13 (Fair Value) and IAS 38 (Intangible Assets)

Our Verdict

Related Glossary Terms

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