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Calculations (FR) > IAS 38 > Flashcards

IAS 38 Flashcards

1
Q

What intangible assets does IAS 38 not apply to?

A

Financial assets
Exploration and evaluation assets
Insurance contracts
Expenditure on natural resources
Intangible covered by another IFRS

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2
Q

What is an intangible asset?

A

An identifiable non-monetary asset without physical substance

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3
Q

Characteristics of an intangible asset?

A

Identifiability
Control
Future economic benefits

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4
Q

What is identifitability?

A

Is separable from the entity or arises from contractual rights

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5
Q

Examples of intangible assets?

A

Patented technology
Import quotas
Trademarks
Customer lists
Video and audiovisual materials
Franchise agreements

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6
Q

When is an intangible asset recognised?

A

Porbable future economic benefits
Can be measured reliably

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7
Q

How can intangibles be acquired

A

Separate purchase
Exchange of assets
Government grant

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8
Q

Does internally generated intangible assets have separate criteria?

A

Yes

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9
Q

What if recognition criteria is not met?

A

Recognised as an expense when it is incurred

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10
Q

What is the probability based on?

A

Supportable assumptions about conditions that exist over life of the asset

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11
Q

Fair value of a business combination presumption?

A

It can be measured reliably

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12
Q

Business combination expenditure that does not meet definition of and criteria for an intangible asset?

A

Form part of amount attributed to goodwill recognised at acquisition date

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13
Q

Reinstatement and IAS 38?

A

Standard prohibits reinstatement of an asset that was charged as an expense

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14
Q

How are research costs charged?

A

As an expense

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15
Q

When are development costs capitalised?

A

When they meet PIRATE criteria

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16
Q

Research and development project acquired in a business combination recognsied?

A

As an asset at cost

17
Q

Initial recognition of internally generated brands, mastheads, titles, lists

A

Are not recognised as an asset

18
Q

Following items should be charged to expense?

A

Internally generated goodwill
Start-up costs
Training costs
Advertising costs
Relocation costs

19
Q

What if entity has made prepayment for items charged as an expense?

A

Prepayment is recognised as an asset until entity receives related goods or services

20
Q

How are intangible assets initially measured?

A

At cost

21
Q

Cost model in IAS 38?

A

Cost - accumulated depreciation - impairment

22
Q

When may revaluation model be used?

A

If fair value can be determined by reference to an active market. This is uncommon

23
Q

Scenarios of revaluation model?

A

Production quotas
Fishing licences
Taxi licences

24
Q

What if the revalued amount has a finite life?

A

It is amortised

25
Q

What is an indefinite life?

A

No foreseeable limit to period over which asset is expected to generate net cash inflows for the entity

26
Q

What is a finite life?

A

Limited period of benefit to the entity

27
Q

How should cost less residual value of an intangible asset with a finite useful life be amortised?

A

On a systematic basis over that life

28
Q

What if amoirtsation pattern can’t be determined reliably?

A

Amortise by straight-line method. This should be reviewed annually

29
Q

How is the amortisation charge recognised?

A

In profit or loss unless another IFRS changes that

30
Q

What are expected future reductions in selling prices indicative of?

A

Higher rate of consumption of future economic benefits embodied in an asset

31
Q

What should happen to an asset with indefinite useful life?

A

It should not be amortised

32
Q

How should useful life of indefinite intangible asset be reviewed?

A

Each reporting period to determine whether circumstances continue to support indefinite useful life of an asset

33
Q

What if there is a change in useful life from indefinite to finite?

A

Should be accounted for as an accounting estimate.

34
Q

What should indefinite intangible asset be assessed for?

A

Impairment

35
Q

Amount of residual value for finite useful life?

A

Normally zero

36
Q

When does amortisation usually begin with finite useful life?

A

When asset is available for use

37
Q

Where are capitalised development costs shown?

A

Under non-current assets

Calculations (FR) (41 decks)

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