Test revaluation eligibility before booking the uplift
Ind AS 38 permits a revaluation model after initial recognition, but requires fair value to be measured by reference to an active market. A discounted-cash-flow report or a negotiated sale of a different asset does not itself satisfy that condition. Paragraph 78 explains why active markets are uncommon for intangible assets and cannot exist for the listed unique assets such as brands, patents and trademarks. Do not copy PPE revaluation practice into an intangible register without this extra gate. ICAI Ind AS 38: paragraphs 72–86.
Identify the class and eligible population
Paragraphs 72–73 address class-wide application and simultaneous revaluation to prevent selective uplifts. Paragraph 81 supplies the exception where an asset in the class cannot be revalued because it has no active market: cost less accumulated amortisation and impairment applies to that asset. The model does not allow recognition of an otherwise unrecognised intangible by calling the entry a revaluation. This guide concerns Ind AS reporting checked on 26 October 2026; the August 2026 amending notification reviewed does not alter these Ind AS 38 provisions.
Document the market rather than assuming it exists
Link the actual right, transferability and relevant jurisdiction to the evidence. The standard mentions possible active markets for certain freely transferable licences or quotas in some jurisdictions; it does not state that every Indian licence has such a market. Preserve the market information supporting the measurement date and consider volatility when deciding revaluation frequency. No universal three-year interval substitutes for the requirement that carrying amounts do not differ materially from fair value at reporting dates.
Separate never-revalued assets from a market that later disappears
Paragraph 82 says a previously revalued intangible whose fair value can no longer be measured by reference to an active market is carried at its last active-market revalued amount, less subsequent accumulated amortisation and impairment. It does not revert automatically to original cost or permit a fresh unsupported uplift. Paragraph 83 notes the loss of an active market may indicate impairment. If the active-market basis later becomes available, paragraph 84 applies the revaluation model from that date.
Then account for the movement and subsequent charges
Paragraphs 85–86 separate OCI/surplus from profit or loss using the same asset’s history: an increase reverses a prior profit-or-loss revaluation decrease to that extent; a decrease uses that asset’s available surplus before a profit-or-loss charge. Reconcile gross amount and accumulated amortisation under paragraph 80, and complete continuing amortisation, impairment and disclosure checks. The examples isolate the stated measurement issue; unless stated otherwise, they exclude tax effects and assume all relevant rights, policies and initial recognition conditions are supported.
Applicable primary references
ICAI Ind AS 38: paragraphs 72–86 ICAI current compendium, Volume II Gazette G.S.R. 725(E), 12 August 2026, reproduced by CA2013
Six worked illustrations
All facts and amounts below are fictional. Assumptions describe the model, not additional statutory rules.
Illustrative example 1: A valuation report cannot create an active market
A recognised patent has cost ₹10,00,000 and accumulated amortisation ₹2,00,000, with no impairment. A valuation report estimates ₹15,00,000, but no qualifying active market exists. Cost-model carrying amount remains ₹8,00,000; the proposed ₹7,00,000 uplift cannot be booked merely because a report exists.
Illustrative example 2: A valid eligible revaluation
Assume a recognised transferable licence in a jurisdiction with a verified active market has carrying amount ₹6,00,000 and eligible fair value ₹9,00,000. The increase is ₹3,00,000. With no prior revaluation decrease in profit or loss for this asset, the increase enters OCI and revaluation surplus, before tax effects.
Illustrative example 3: An asset in the class lacks its own active market
Assume eligible licence A is validly revalued from ₹4,00,000 to ₹5,00,000. Licence B in the same class cannot be revalued because it has no active market; its cost ₹3,00,000 less amortisation ₹60,000 and impairment ₹20,000 gives ₹2,20,000. Combined carrying amount is ₹7,20,000; A’s market does not automatically validate a separate ₹4,00,000 valuation of B.
Illustrative example 4: The active market disappears after a past revaluation
The last valid active-market revalued amount was ₹12,00,000. Subsequent accumulated amortisation is ₹2,00,000 and subsequent impairment ₹1,00,000. Paragraph 82 gives ₹9,00,000. Do not replace that bridge with an unsupported ₹14,00,000 appraisal or automatically restore original cost.
Illustrative example 5: Reverse the same asset’s previous profit-or-loss decrease
Assume an eligible asset increases from ₹5,00,000 to ₹8,00,000, and has a supported prior revaluation decrease of ₹1,00,000 recognised in profit or loss available for reversal. Of the ₹3,00,000 increase, ₹1,00,000 enters profit or loss and ₹2,00,000 enters OCI/surplus, before tax effects.
Illustrative example 6: A decrease exceeds that asset’s surplus
An eligible asset falls from ₹9,00,000 to ₹5,00,000 and has a credit revaluation-surplus balance of ₹1,50,000 for that asset. The ₹4,00,000 decrease reduces OCI/surplus by ₹1,50,000 and charges profit or loss ₹2,50,000, before tax effects. Surplus on another asset is not substituted.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Confirm the reporting basis | Ind AS applicability and current standard text. |
| 2 | Ground initial recognition | Existing recognised intangible and supported original measurement. |
| 3 | Identify the asset class | Similar nature/use and complete class population. |
| 4 | Establish the active market | Actual right, jurisdiction and market evidence. |
| 5 | Check excluded valuation shortcuts | No unsupported brand/patent uplift or valuation-report substitution. |
| 6 | Set the measurement date | Fair value and material-movement review at reporting date. |
| 7 | Identify missing-market cases | Never eligible versus previously validly revalued assets. |
| 8 | Calculate the measurement bridge | Cost or last revaluation less applicable accumulated charges. |
| 9 | Allocate movements by asset history | Prior profit-or-loss decreases and asset-specific surplus. |
| 10 | Complete subsequent reporting | Amortisation, impairment, disclosures and tax-effect review. |
Sixteen practitioner FAQs
1. Does a valuation report alone permit intangible revaluation?
No. The revaluation model requires reference to an active market.
2. Are intangible active markets common?
Paragraph 78 says they are uncommon.
3. Can a unique patent be revalued merely from a DCF report?
No. The standard’s active-market restriction must be respected.
4. Do all transferable licences have active markets?
No. Verify the actual right and market in its jurisdiction.
5. Can revaluation recognise a previously unrecognised asset?
Paragraph 76 does not allow that shortcut.
6. Can only the asset with the largest gain be selected?
Class consistency and simultaneous revaluation requirements prevent selective application.
7. What if an asset in the class has no active market?
Paragraph 81 requires its cost less accumulated amortisation and impairment.
8. What if a previously active market disappears?
Use paragraph 82’s last-valid-revaluation bridge with subsequent accumulated charges.
9. Does market disappearance automatically restore original cost?
No. That is not paragraph 82’s stated fallback.
10. Can disappearance indicate impairment?
Yes. Paragraph 83 identifies that possibility.
11. What if an active market becomes available later?
Paragraph 84 applies the revaluation model from that later measurement date.
12. Is annual revaluation always mandatory?
Frequency depends on fair-value movements and the reporting-date material-difference requirement.
13. Does every upward movement enter OCI?
A same-asset prior revaluation decrease in profit or loss may first require reversal there.
14. Can another asset’s surplus absorb a decrease?
The relevant credit balance is in respect of that asset.
15. Do revalued finite-life assets stop amortising?
Revaluation does not itself remove the continuing amortisation requirements.
16. Are the worked movements after tax?
No. The illustrations explicitly isolate pre-tax measurement movements.
Conclusion
An intangible valuation report alone does not permit revaluation. Ind AS 38 requires an active market, class consistency and specific fallback treatment when that market disappears.