C4 IAS 38 Intangible Assets

Question 1

Definition

Answer 1

Identifiable non-monetary assets without physical substance. An asset is identifiable if:

1. Separable or
2. Arises from contractual/ legal rights

Question 2

Recognition

Answer 2

1. Probable that future economic benefits will flow to the entity
2. The cost of the asset can be measured reliably.

Question 3

Initial measurement:

Answer 3

Purchased:
-cost

Internally generated:
-capitalise If
Probable future economic benefits

Intention to complete/use or sell

Resources adequate and available to complete use or sell

Ability to use/sell

Technical feasibility

Expenditure can be measured reliably

Question 4

Never capitalized:

Answer 4

Internally generated brands, mastheads, publishing titles and customer lists, startup costs, training, advertising, relocation, reorganization.

Question 5

After recognition, choice of

Answer 5

Cost model

Revaluation model : revaluation only by reference to an active market

Question 6

Amortization

Answer 6

• Finite useful life: systematic basis over useful life

- Indefinite UL/ at least annual impairment tests

Question 7

Impairment

Answer 7

Charge first to OCI ( for any revaluation surplus then PL)