# AS 26 + AS 28: Impairment of Internally Generated Intangible Assets
## Step 1 — Establish Carrying Amount (AS 26 Rules)
Before applying AS 28, correctly determine what has been capitalised.
| Phase | AS 26 Treatment |
|---|---|
| Research Phase | Expense to P&L — never capitalise |
| Development Phase | Capitalise as intangible asset (if all recognition criteria met) |
> The switchover from Research to Development phase is based on the date when the enterprise can demonstrate technical and commercial feasibility.
## Step 2 — Apply AS 28 Impairment Test
Once the CA of the capitalised intangible is determined (development costs only), apply the normal impairment test:
Impairment Loss = CA − RA (if positive)
The loss is charged to P&L.
## Multi-Period Build-Up of CA
In each subsequent period, additional qualifying development expenditure is added to the existing CA:
Revised CA = Opening CA + Current period development expenditure
Then test: Is revised CA > RA? If yes → impairment.