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ACCGOVP > Chapter 11: Intangible Assets > Flashcards

Chapter 11: Intangible Assets Flashcards

1
Q

These are identifiable, non-monetary assets without physical substance.

A

Intangible Assets

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2
Q

Essential Elements of Intangible Assets

A
  • Identifiability
  • Control
  • Future Economic Benefits
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3
Q

An element that emphasizes that an intangible asset is separable and arises from binding arrangements.

A

Identifiability

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4
Q

When an intangible asset is capable of being separated and divided from the entity and sold, transferred, licensed, rented, or exchanged, either individually or together with a related contract, it is?

A

Separable

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5
Q

When an intangible asset includes contractual or other legal rights, regardless of whether those rights are transferable or separable from the entity or from other rights/obligations, it __________?

A

Arises from Binding Arrangements

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6
Q

An element that emphasizes that the entity has the ability to benefit from the intangible asset or prevent others from benefitting from it. This normally arises from legal rights that are enforceable in a court of law.

A

Control

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7
Q

Is the legal enforceability of a right a necessary condition for control?

A

Naur, because an entity may be able to control the future economic benefits or service potential in some other way.

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8
Q

An element that emphasizes that the future economic benefits or service potential flowing from an intangible asset may include revenue, cost savings, or other benefits from its use.

A

Future Economic Benefits or Service Potential

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9
Q

When is an intangible asset RECOGNIZED?

A

If it meets the definition of an intangible asset and the recognition criteria for assets.

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10
Q

If the mode of acquisition is PURCHASE:

A
  • Purchase Price + Direct Costs (including non-refundable taxes but excluding trade discounts and rebates)
  • DEFERRED PAYMENT: cash price equivalent.
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11
Q

If the mode of acquisition is through NON-EXCHANGE TRANSACTION:

A

Fair Value at the Acquisition Date

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12
Q

If the mode of acquisition is through EXCHANGE:

A

If WITH commercial substance:
1) FV of asset given up (plus cash paid/minus cash received)
2) FV of asset received
3) CA of asset given up (plus cash paid/minus cash received)

If WITHOUT commercial substance:
- CA of asset given up (plus cash paid/minus cash received)

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13
Q

If the mode of acquisition is through ENTITY COMBINATION:

A

Fair Value at the Acquisition Date

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14
Q

Peculiar measurement is made for intangible assets that are not purchased but are rather:

A

Internally Generated or Self-Generated

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15
Q

The two phases in which an entity classified the generation of the asset:

A
  • Research Phase
  • Development Phase
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16
Q

This phase is the original and planned investigation undertaken with the prospect of gaining new scientific and technical knowledge and understanding.

A

Research Phase

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17
Q

Expenditures during the research phase are:

A

Expensed

18
Q

This phase is the application of research findings or other knowledge to a plan or design for the production of new or substantially improved materials, devices, etc. BEFORE THE START OF COMMERCIAL PRODUCTION OR USE.

A

Development Phase

19
Q

If it is not clear whether an expenditure is a research or a development cost, it shall be treated as:

A

Research Cost

20
Q

Can an expenditure charged as an expense be subsequently capitalized?

A

Naur.

21
Q

Are INTERNALLY GENERATED brands, mastheads, publishing titles, customer lists, and similar items recognized as intangible assets?

A

Naur.

22
Q

Selling, administrative, general overhead, costs of inefficiencies, initial operating losses, and training costs are:

A

EXPENSED and NOT CAPITALIZED AS COST OF INTANGIBLE ASSET.

23
Q

Subsequent expenditures on recognized intangible assets are:

A

Expensed, unless they meet the definition of an intangible asset and the asset recognition criteria.

24
Q

Subsequent Measurement of Intangible Assets

A

Cost less Accumulated Depreciation and Accumulated Impairment Losses

25
Q

This is the systematic allocation of the depreciable amount of an intangible asset over its useful life.

A

Amortization

26
Q

An intangible asset is considered to have this if there is no foreseeable limit to the period over which it is expected to provide economic benefits or service potential to the entity.

A

Indefinite Life

27
Q

An intangible asset is considered to have this if it has a limited period of benefit to the entity.

A

Definite Life

28
Q

If an intangible asset has an indefinite life, is annual testing for impairment needed?

A

Yessir.

29
Q

What depreciation method is used for intangible assets with finite life?

A

Straight-Line Method

30
Q

Over a period of what is an intangible asset amortized?

A

Over a period of 2 to 10 years.

31
Q

When does amortization start?

A

When the intangible asset is available for use.

32
Q

When does amortization start?

A

When the intangible asset is available for uses.

33
Q

Does amortization cease when the asset is no longer used?

A

Naur, except when it is fully depreciated or classified as held for sale.

34
Q

Residual value is assumed to be:

A

0 or zero, except when there is a third party commitment to purchase the asset at the end of its useful life.

35
Q

Changes in useful life or amortization method shall be accounted for as:

A

Changes in accounting estimates

36
Q

An entity is required to test for impairment an:

A
  • Intangible asset with an indefinite useful life.
  • Intangible asset not yet available for use.
37
Q

An entity shall test for impairment an intangible asset with DEFINITE LIFE only when:

A

When there is an indication of impairment.

38
Q

An intangible asset is DERECOGNIZED when:

A

When it is disposed of or when it has no future economic benefits or service potential expected from the asset.

39
Q

The difference between the CA and the proceeds is:

A

Gain or Loss

40
Q

This is capitalized ONLY IF ALL of the conditions listed in the GAM for NGAs are met.

A

ACCGOVP (9 decks)

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