What are the conditions for recognizing intangibles under IAS 38?

The correct conditions for recognizing intangibles under IAS 38 are that there must be probable future economic benefits and reliable cost measurement. This means that an intangible asset can only be recognized if it is expected to generate future economic benefits for the business, such as through increased revenue or cost savings. Additionally, the cost of the intangible asset must be reliably measurable, which allows the entity to determine its carrying amount on the balance sheet.

This recognition principle emphasizes the importance of both the prospective financial benefits and the ability to accurately quantify the investment in the intangible. Without either of these conditions being met, it would not be appropriate to recognize the intangible asset in the financial statements.

In contrast, while options that discuss high costs or amortization are relevant to intangibles, they don't specifically capture the broader requirement of future economic benefits and reliable measurement. For intangibles, it is essential to assess the future economic benefits rather than a singular focus on cost. Similarly, stating that it must be backed by goodwill overlooks the systematic criteria for recognizing intangible assets, which focuses on their inherent economic benefits, rather than their relation to goodwill.