How are intangible assets reported under IFRS?

Intangible assets under IFRS can be reported using either the revaluation model or the cost model, which is why the correct choice is the answer indicating this option.

When utilizing the cost model, an intangible asset is reported at its initial recognition cost, minus any accumulated amortization and any accumulated impairment losses. This reflects a straightforward approach where the asset is valued based on the actual costs incurred to acquire it.

On the other hand, the revaluation model allows for the intangible asset to be carried at a revalued amount, which is its fair value at the date of revaluation less any subsequent accumulated amortization and impairment losses. To adopt this model, the intangible asset must have a reliable measure of fair value, and this means that entities can reflect changes in market conditions or valuations over time, potentially enhancing the relevance of financial information presented.

This flexible reporting framework under IFRS provides entities with an option to present their intangible assets in a way that could better reflect their economic realities, depending on the nature of the assets and the appropriate market conditions.