Ch. 9 - quiz Flashcards
An intangible asset is an identifiable monetary asset without physical substance.
True or False
False
Research costs cannot be capitalised; they are recognized as expense.
True or False
True
If the separation of research and development (R&D) activities is impossible, the costs are booked as expenses.
True or False
True
Goodwill represents the value created by a company that is captured in the intangible assets recognized on its balance sheet.
True or False
False
Self-generated goodwill may be recognized, due to its economic importance in today’s knowledge-based economy.
True or False
False
Expenditure on advertising and promotion never gives rise to the recognition of an intangible asset.
True or False
True
Expenditure on research shall be recognized as an expense when it is
incurred.
True or False
True
All intangible assets that are recognized on the balance sheet must be amortized over their useful lives.
True or False
False
Intangible assets are normally classified as non-current assets
True or False
True
The residual value of an intangible asset with a finite useful life is always zero.
True or False
False
The statement concerning asset Recognition that is not correct is?
A. The accounting standards prohibit the recognition of internally generated goodwill as an asset.
B. The accounting standards prohibit the recognition of internally generated assets arising from development expenditures.
C. The accounting standards prohibit the recognition of internally generated assets arising from research expenditures.
D. The accounting standards prohibit the recognition of internally generated assets arising from advertising activities.
B
Which of these is not an argument in favour of restricting the recognition of internally generated goodwill?
A. Goodwill is not separable from other assets.
B. There are difficulties in identifying whether and when goodwill will generate future economic benefits.
C. It is very difficult to measure internally generated goodwill reliably.
D. For some companies internally generated goodwill is the largest
asset they have
D
The use of the revaluation measurement model for
intangible assets is?
A. Common
B. Mandatory
C. Rare X
D. Prohibited
C
The amortization method used in relation to an intangible asset should be chosen so as to?
A. Maximize the amortization charge in the early years of the asset’s useful life.
B. Write off the asset as soon as possible.
C. Evenly spread the cost of the asset over its useful life.
D. Reflect the usage pattern of the asset.
D
Goodwill does not fall within the scope of the IAS38 definition of an intangible asset because?
A. It is not separable.
B. It may not generate future economic benefits.
C. It is a monetary asset.
D. None of the above
A
